Double-Digit Weekly Drop

Bitcoin fell 13 percent last week as the S&P 500 registered its biggest weekly decline since 2008

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March 2, 2020 The S&P 500, an index of large U.S. stocks, fell by 11 percent last week to register its biggest weekly drop since the financial crisis of 2008.  Equity markets cratered as the coronavirus spread outside China at a faster rate, triggering fears of global recession.  Interestingly, bitcoin, the top cryptocurrency by market value, also fell by 13 percent last week, confounding a few analysts, who were expecting the cryptocurrency to benefit from risk aversion. Bitcoin had rallied by 30 percent in January amid the U.S. Iran tensions and the beginnings of the coronavirus outbreak in China.  Billionaire investor and Galaxy Digital founder Micheal Novogratz thinks bitcoin served as a source of liquidity to fund margin calls triggered by the stock market crash. A margin call occurs when the value of the investor’s leverage account drops below the minimum margin requirement. The investor is then required to bring in additional capital or securities to build back the account up to the minimum margin requirement.  Gold also fell by 4 percent – also the biggest weekly loss since November – reportedly due to margin calls.  While bitcoin underperformed last week, it is still posting bigger gains on a year-to-date basis than the S&P 500 and gold. The cryptocurrency is still up 20 percent on a YTD basis, while the S&P 500 is down 9 percent and gold is reporting a 4 percent rise.  Seller Exhaustion BTC: Price: $8,770 | Market cap: $160 billion | 24-Hr Volume: $40.76 billion Trend: Bearish Bitcoin produced a doji candle on Sunday, signaling seller exhaustion in the market and aborting the immediate bearish view. So far, the follow through has been positive.  At press time, the cryptocurrency is trading near $8,770, representing over 2 percent gains on the day. However, a bullish doji reversal pattern would be confirmed if prices print a UTC close above the Sunday's high of $8,750 on Monday.  That could invite chart-driven buying, yielding a test of the former support-turned-hurdle of the head-and-shoulders neckline at $9,500.  However, if the buyers struggle to keep prices above $8,750, a fresh move lower to $8,400 could be seen. A violation there would expose the next support lined up near $8,20 (Jan. 24 low).  Read Analysis Nevada's $170 Million “Blockchain City” Facing Challenges (Decrypt) The company behind an ambitious attempt to build a “Blockchain City” in the Nevada desert has laid off a tenth of its employees Chinese Crypto and Blockchain Firms Grapple With Coronavirus Outbreak (Coindesk) The outbreak has complicated tech upgrades, product development, logistics and business travel at crypto exchanges and other blockchain firms in China. Forget The Coronavirus—Is This The Real Reason Bitcoin Suddenly Collapsed? (Forbes) Comments accompanying a ruling have suggested the SEC might not greenlight a bitcoin ETF for the foreseeable future. Six Conversations We Need to Have About Cryptocurrency Now But Won’t (Medium) These conversations will not get clicks or YouTube subs. They will never trend on Twitter. U.S. Congress will not hold hearings about them. Solving these problems won’t get you a Lambo. Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.