Bitcoin Struggles to Hold $7K as US Stocks, Oil, Gold Fall in Sync

• Bitcoin briefly dipped below $7,000 as the US oil prices collapsed to their two-decade low.
• The cryptocurrency’s price declined alongside US equities and Gold markets, again exhibiting a risk-on behavior.
• The US dollar, on the other hand, jumped on safe-haven demand.

Bitcoin briefly fell below its $7,000-support in what appears to be a panic-sell caused by the upsetting US oil prices ahead of the New York morning bell.

The benchmark cryptocurrency plunged 2.95 percent to log an intraday low of $6,920. It shortly recovered part of its losses, reclaiming $7,000  to mark the presence of bulls, but hinted a turbulent week ahead as it continues its short-term correlation with the bearish US stocks.

US Market Sell-off

The US benchmark S&P 500 was set to begin Monday in the negative area, with its futures implying to open 49 points lower, according to CNBC pre-market data. Its downside predictions followed the collapse of the US oil benchmark, West Texas Intermediate, to its two-decade low.

It slid 30 percent to $11 per barrel as lockdown imposed because of the fast-spreading Coronavirus pandemic hit the oil demand.

The dangers lurking in the US financial market affected an otherwise non-correlated asset like bitcoin. As of late, investors have sold off the cryptocurrency to cover their losses elsewhere. Bitcoin’s top competitor Gold has also faced similar sell-offs during US stocks meltdown.

The yellow metal fell by 0.68 percent to $1,671.21 an ounce during the European session Monday.

Bitcoin is now at the risk of extending its downside moves as investors move to the US dollar as their 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 that has led investors to expect more market volatility.

US Dollar Up; Troubles for Bitcoin?

While bitcoin, gold and US stocks plunge, the demand for US dollar remains strong. The US Dollar Index, which tracks the greenback against a basket of foreign currencies, jumped by 0.34 percent on safe-haven demand Monday.

As the market heads further into a recession, and disruption in economic activity continues with rising Coronavirus cases, bitcoin is one of those assets that would remain under the risk of bearish swings. Meanwhile, its profitability in the near-term could make it an ideal asset to liquidate for dollar, adding more downside pressure.

So far, bitcoin is maintaining its April gains.

Cover image via Unsplash.