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Investors rush to safe havens while Bitcoin fails to meet expectations

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Safe-haven belongings are on the rise amid considerations over a widening coronavirus outbreak. Meanwhile, Bitcoin collapsed over the weekend as traders start to query its functionality to act as a hedge.

Global rush into havens

Gold costs surged above $1,700 per ounce as traders massively took a flight to security worldwide. The valuable metallic hit the best it has been in additional than seven-year displaying immunity to the coronavirus, which has injected concern throughout all the key international economies.

Michael McCarthy, the chief market strategist at CMC Markets, defined:

“There’s a clear rush to safe-haven assets at the moment and gold’s a major beneficiary. [Markets are concerned that] we could see a more ugly situation before things get better, which of course is good news for gold.”

GOLD/USD by TradingView

The state of commotion within the international monetary markets led Goldman Sachs Group Inc. to elevate its 12-month forecast for gold by $200. The financial institution affirmed that within the occasion that the coronavirus impact spreads to the second quarter of the 12 months, gold may climb to $1,800 per ounce on a three-month foundation.

Bitcoin fails to meet expectations

Spot gold surged as a lot as 8.2 p.c for the reason that starting of the month.  It not too long ago hit a excessive of $1,703.60 an oz.. In the meantime, Bitcoin, which is seen by many as a “digital gold” safe-haven, took a 12 p.c nosedive.

The flagship cryptocurrency moved beneath the $8,000 stage for the primary time since January. It went down to hit a low of $7,730 over the weekend.

Bitcoin US dollar price chart
BTC/USD by TradingView

Bitcoin’s failure to rally on probably the most splendid monetary circumstances was a transparent signal {that a} steep decline was coming, according to the CEO of Euro Pacific Capital Peter Schiff.

Along the identical traces, Nobel-winning economist Nouriel Roubini advised that the poor efficiency that BTC has had throughout this international epidemic obliterates the notion that it could act as a hedging asset throughout occasions of economic turmoil.

Roubini said:

“Bitcoin is down 8% in the last day, much more than global equities. Another proof that Bitcoin is NOT a good hedge vs risky assets in risk-off episodes. It actually falls more than risky assets during risk-off. So BTC is a shitty shitcoin hedge in risk-off cases.”

With eight new international locations together with Bulgaria, Costa Rica, Faeroe Islands, French Guiana, Maldives, Malta, Martinique, and Republic of Moldova reporting their first instances of coronavirus, traders tremble in “extreme fear” of an additional downturn within the cryptocurrency market.

Although concern will be seen as a optimistic signal in accordance to the Crypto Fear and Greed Index, technical analysts Michaël van de Poppe maintains that Bitcoin may nonetheless drop to $7,350.

Bitcoin, at present ranked #1 by market cap, is down 9.37% over the previous 24 hours. BTC has a market cap of $144.8B with a 24 hour quantity of $47.1B.

Chart by CryptoExamine

Bitcoin is down 9.37% over the previous 24 hours.

Posted In: Bitcoin, Analysis, Price Watch

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