The fears arising from the impact of the coronavirus on the global economy are reaching overwhelming levels. The last few days have seen the traditional capital markets experience a bloodbath, particularly March 12.
Covid-19 caused investors to panic resulting in major sell-offs across different asset classes. Many crypto proponents had thought that cryptos, primarily Bitcoin would act as a haven asset in times of global economic crisis and uncertainties.
However, that is yet to be the case so far, according to data published by IntoTheBlock.
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The entire crypto market experienced its worst day since January 2015. It has been severely affected recently, with prices dropping rapidly wiping about $50 billion from the market capitalization.
Bitcoin’s 41% crash resulted in a similar drop of 41.01% of the number of addresses in the money, as documented by IntoTheBlock’s (ITB) In/Out of the Money data tool.
What does In/Out of the Money mean?
For any address with a positive balance of tokens, ITB identifies the average price (cost) at which those tokens were purchased and compares it with the current price.
The same report revealed that 41.01% of addresses were in the money, 11.82% broke even while 47.18% were out of money.
Bitcoin Price Analysis
Within an hour on March 13, the Bitcoin price dropped below $4,000 after instantly losing 11.24%, setting a new yearly low of $3,782.
But, the steep downside move was short-lived as the price rebounded quickly to $5,260. Minor resistance levels had formed between $4,500 and $5,300 in the region, where 777 thousand addresses bought 454.67k BTC.
However, Bitcoin gained some upside momentum breaking even the major resistance levels that had formed between $5,200 and $5,370. In that region, 114BTC was held by 325 thousand addresses.
On the 1-hour timeframe, a strong oversold bounce took place after the relative strength index (RSI) plunged to 8.45. That RSI plunge represented a low never seen since November 23, 2018. For now, traders are following developments to see if the oversold bounce will increase purchasing volume.
Some commentators allege that the plummet below $4,000 may have liquidated most of the Bitcoin-backed loans that are offered by the decentralized finance platforms.
After the drop, Bitcoin was expected to bounce off the high volume node of the volume profile visible range from $4,030 to $3,637, and that is what happened. The crypto market cap now stands at $164.1 billion and Bitcoin’s dominance is 63.9%.
Bitcoin price on March 12 crashed 46% within a day and then recovered above $5,000. The Bitcoin holders are in the money based on the current price of $5,740.
