The benchmark cryptocurrency fell 2.95 percent to hit an intraday low of $ 6,920. Shortly thereafter, Bitcoin recovered some of the losses and regained the $ 7,000 mark before another reset caused Bitcoin to drop to $ 6,950. The price move points to a turbulent week as Bitcoin continues its short-term correlation with declining US stocks.
Clearance on the US market
The S&P 500 should start negatively on Monday as its futures were trading 49 points lower before the market opened, according to CNBC data. The oil price also followed its downward movement, which plummeted during the descent.
The dangers lurking in the US financial market hit an otherwise uncorrelated asset like Bitcoin pretty hard. Lately, investors have been selling the cryptocurrency to cover their losses on other assets. Bitcoin's main competitor , gold, was also facing similar sell-offs during the collapse of US stocks.
The metal fell 0.68 percent to $ 1,671.21 an ounce during the European session. Bitcoin is now at risk of widening its downward moves as investors move towards the US dollar as a short-term safe haven ahead of the release of macro data and corporate earnings this week. Coca Cola, Netflix, Delta Airlines would release their first financial reports during the coronavirus pandemic, which has prompted investors to expect further volatility.
US dollar on the upswing; Problems for bitcoin?
As Bitcoin, gold and the US stock market collapse, the demand for US dollars remains strong. The US dollar index rose 0.34 percent on Monday due to the demand for safe havens.
As the market continues to move into recession and the pause in economic activity continues with rising coronavirus cases, Bitcoin is one of those investments that are still at risk of bearish rashes. In the meantime, short-term profitability could make Bitcoin an ideal asset to liquidate for the dollar, which would add to the downward pressure.
