Bitcoin price drops as investors flee risk assets for cash. Cryptocoin. com
As we reported earlier on , Bitcoin price has dropped by as much as 11% since Friday and dropped below the $43,000 level despite currently being at these lows.
How does Bitcoin behave?
While a double-digit percentage move in either direction is not uncommon for the leading cryptocurrency, Bitcoin does not act as a store of value asset as designed. The stock market is in free fall and the fear has also affected cryptocurrency investors. Meanwhile, the gold price rose slightly on the day as investors flocked to the precious metal (gold) instead. Investors appear to be completely risk-averse to start the week in response to debt problems that they fear could have a contagious effect on Chinese property developer Evergrande. Will Meade, a former hedge fund manager who now manages his own money, said that the price of Bitcoin could drop further:
Bitcoin technically looks weak here as it is forming a bearish head and shoulders pattern that could push it back to $30,000. Hedge funds are completely risk-free here due to potential spread, including the sale of Bitcoin from Evergrande. Therefore…Bitcoin needs to prove that it is not correlated with the stockdollar series, and today’s results are not helping that purpose.
Meade recently tweeted that if Bitcoin manages to “break out of the stock market,” it would be the “Holy Grail” for institutional investors.
Meade went on to say that the price of Bitcoin and the series of stocks are in a volatile course:
I think Bitcoin will continue to remain weak for the next few days, with the first level of support coming in at $38,000. Currently, hedge funds and institutions seem to be selling all their risk assets to raise cash. This means 10-15% decline in major indices. Historically, September 17-October 1 is one of the worst seasonal periods for the stock market all year.
Meltem Demirors, chief strategy officer at CoinShares, described the Evergrande hassle as “main financial crisis porn” and said that although the situation has been unfolding for months, no one cared until the last horrific headline. Demirors linked the event to “narrative loops,” reminding his Twitter followers that just a week ago, crypto investors were worried about stablecoin Tether.
Bitcoin is a volatile asset and therefore market leaders are not afraid of the latest drop. In fact, many are buying from the bottom, including Zac Prince, CEO of BlockFi, a wealth management platform for crypto investors.
st and trader Alex Kruger explained that even Bitcoin is not immune to the “all-effects” systemic risk. In a tweet, Kruger suggested that this is a “good time for investors to rebalance portfolios and turn from dogs to better performers.”