Virus Fears Spark Macro Selloff
Fears of a new coronavirus variant that could lead to more economic lockdowns across the global economy led to markets to sell off across the board this morning.
U.S. equities opened sharply lower, with the S&P 500 down 2.36% at the time of writing.
The VIX, which is a volatility index of the S&P 500 and is often used as a measure of financial market stability, saw a sharp rise to an intraday of 28.5.
Commodities also got hit, with West Texas Intermediate (WTI U.S. Crude Oil) getting clobbered to the tune of down12.48% intraday, as investors have begun to fear more economic slowdowns/lockdowns globally.
With the response in various macro asset classes across the board, bitcoin has also faced downside pressure. The latest macro selloff, especially for risk-on assets, takes bitcoin price down 21% from it's all-time high. Most long-term holders are now well-experienced in bitcoin price drawdowns from all-time highs with the latest price move being right around the average drawdown percentage for the year. For context, bitcoin has shown to be much less volatile this year relative to a lifetime average price drawdown from all-time highs of 49%.
Currently the bitcoin price sits right above a critical support, the current short-term holder cost basis, that we highlighted in The Daily Dive #105. Almost a quarter of bitcoin supply has last exchanged hands above the $50,000 range which signals increased demand for bitcoin at this psychological level and higher prices. Yet, it does leave a smaller amount of supply to support bitcoin price if price starts to fall below the short-term holder cost basis of $53,244. This is a key price area to keep an eye on over the next few days. The next largest area of support that we can see on-chain is above $47,000.
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