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Bitcoin continues to fall for the second day in a row, dropping at the moment to the level of $5600. Why bitcoin (EXANTE: Bitcoin) price is falling now? Is the asset still "digital gold"?
Alexey Kirienko, EXANTE CEO: Markets are currently in a general sense of panic. The economy was hit hard by the imposition of two negative factors: the spread of coronavirus and the collapse of oil prices. Now people are losing business, work. Some sell assets, not just cryptocurrency, to get a cache and close their spending. Others are out of fear of uncertainty.
It is worth noting that cryptocurrencies are more volatile in nature, they will greatly decrease, and then will also rise sharply. I think that in two weeks or a month the markets should stabilize. The main thing for investors now is not to panic. It may be worth for those who have money in the cash to smoothly begin to build up positions.
Gregory Klumov, STASIS Founder: Bitcoin is falling, because there are always investors who hold bitcoin and, conditionally, US technology stocks. As large-scale margin calls are now occurring across all equity markets, investors are liquidating assets in other pockets to compensate for these margin calls, accumulate cash and rethink which asset classes will benefit in the current condition.
Bitcoin definitely has the status of a protective asset but in the medium-term perspective. In the short-term perspective, markets move towards the least resistance against the maximum number of open margin positions. That is, if a lot of people have leverage long, then the market in the short term is most likely to move down, and vice versa. Leverage short still does not appear in bitcoin, rather, the fall equalized longs and shorts. No one buys anything but food, ventilators, and stocks of mask makers.
As soon as the situation in global markets settles, and it does not matter whether they remain at the same level, whether they rise or fall, the main thing is a certainty. It is not so important that the economy worsens or stabilized, as soon as clarity appears, Bitcoin will continue the upward trend that began at the beginning of the year.
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