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As number of COVID-19 infected globally is approaching 1 million people, the crypto market seems to be stuck at current levels. On one hand, the FED has printed somewhat USD 4 trillion to support the financial system and prevent collapsing — and the new money definitely diminishes the dollar. With a rapid fiat cash injection like this one, cryptocurrencies seem to become a possible shelter from hyperinflation again.
On the other hand, unlike in 2017 and earlier, blockchain projects and crypto markets are more and more perceived these days as functional parts of the ‘normal’ economy, thus, Bitcoin adoption matters, investors and commentators say. With the US GDP going under the water and posting Q-o-Q decline of roughly 24%, the worst since The Great Depression, chances are high that new businesses won’t be fast in building a new crypto demand.
A question of liquidity arises as well. In the most severe moments of decline, cryptos lost close to 50% in one day. Not a problem given the overall market situation but lack of liquidity we witnessed those mid-March days calls for some mild scepticism raising questions if the market is mature enough already. In any case, BTC seems to find new comfort levels at around $6,000-6,500, and we are less likely moving to $3,500 of below.