The price of the leading cryptocurrency dropped below the $7,000 mark on Monday, April 13, the lowest the Bitcoin price has been in more than a week.
BTC Price Dips Below $7,000
Bitcoin has continued its struggle to recover following its crash in March. The cryptocurrency took another hit on Monday after it dropped below the $7,000 mark. In the process, it wiped away most of the gains it recorded in recent weeks.
The price drop came about after traders saw bearish signals in the futures market. The Bitcoin price dipped by 1.6% to trade at around the $6,900 region, while Ether also lost 1.8% of its value and currently trades at $158 per coin.
The other leading digital currencies all recorded losses over the past 24 hours. Bitcoin Cash, fresh from its halving event, was down by 4.8%, EOS dipped by 2.6%, and Bitcoin SV lost 1.9% of its value.
Bitcoin futures contracts for June on cryptocurrency exchanges, such as Kraken, were trading at $6,750, thus, suggesting that traders are pricing the futures even lower. The decrease in futures prices was a shift from last week when they were trading at a premium price.
Maxine Boonen, the chief executive of over-the-counter (OTC) Bitcoin liquidity provider B2C2 stated that based on the activity of traders and the futures market, it is evident that speculators are expecting to see lower prices in the short term. To put it into perspective, Boonen stated that a particular hedge fund had sold $20 million of Bitcoin to the exchange and that their actions in the past have usually been right.
Early losses in the futures market on Monday saw a $29 million in position liquidations for the traders on BitMEX. As a result of this, this led to a further sell-off. The hourly sell-off on BitMEX averaged around $20,000 over the past few days.
The Markets and the Coronavirus
The continuous negative trend in the international market is putting pressure on the cryptocurrency market, and it could last for a while. The S&P 500 of large U.S. stocks lost 1% of its value on Monday as the death toll from the coronavirus pandemic continues to rise. New York State, which has become the epicenter of the outbreak in the United States, surpassed 10,000 deaths on Monday, according to Governor Andrew Cuomo.
Constantine Kogan, a partner at crypto fund BitBull Capital, believes that since macroeconomic trends are not positive at the moment, this will continue to put pressure on cryptocurrencies. While Bitcoin and other cryptocurrencies are suffering, gold seems to be a safe haven asset that is gaining traction. The price of gold surged by 1.2% on Monday as more people hedge against inflation by investing in this precious metal.
While some analysts and investors believe Bitcoin could prove to be a safe haven asset against inflation, gold has been outperforming it in that department. Denis Vinokourov, Bequant’s head of research, stated that if Bitcoin price dropped below the $6,500 mark, then a fresh round of liquidation could follow to send the price even lower to $6,100. He added that a drop in value would be painful to the bulls. “There really isn’t much support until the $5,000 zone. The shift in the futures curve supports the cautious tone,” he concluded.