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Digital Asset Daily: fear turns into panic

with Mati Greenspan

If Friday we spoke of fear, from Monday morning, the markets feel a total panic.

President Trump, along with Congress, did a good job of calming people down on Friday afternoon by assuring the public that they were ramping up production of coronavirus test kits, but the gains over the weekend have been great. too difficult for the markets to understand. Expect another Trump press conference in the next few hours.

Regarding volatility, we are now at levels last seen during the financial crisis 12 years ago.

Futures markets were so slippery last night they hit limit. This means that they have lost the maximum amount that the stocks are allowed to lose in a single trading session. Yeah, that’s one thing. I don’t mean to be alarmist or anything, but there are two other lower limits at 13% and 20% respectively.

Crude oil, on the other hand, has no limit and ended up dropping 27% after Russia refused to agree to Saudi Arabia’s production cuts. Needless to say, everything to do with oil and energy is collapsing today.

The dollar frown

Among all the scandalous moves in the market in recent times, the fall of the US dollar is probably the most under-reported.

Usually the USD tends to play a supporting role and acts as a kind of safe haven in times of crisis. The Dollar Smile is a theory that the USD should do well when the economy is good because people will want to take advantage of opportunities and it should do well when times are bad because people will use it as safe investment.

However, in this time of extreme stress, we have a real chance to examine the strength of the global reserve currency. At least for now, it is not the US dollar but the Japanese yen that fulfills the role of safe haven today.

Here we can see the relative movements of the Forex market today. The USD is down sharply against just about everything except the Canadian dollar, which is undoubtedly suffering from the drop in crude oil.

If we zoom out we can see that the USDJPY has been a major driver of recent volatility.

Return to mirror mode

Right now, with everything going on in traditional markets, it doesn’t seem like too many people are in the mood to buy. In fact, it seems that after a few days of consolidation, the cryptocurrency the market is back to the image of stock indices.
As we have said many times before, the digital market does not exist in a bubble. He is very affected by everything that is happening in the economy in general and in the world. By taking a look at the social media word bubble on LunerCRUSH, we can see exactly what’s going on inside the mind of cryptocurrency traders today.

The word “coronavirus” appeared in 11% of social media posts. But that’s to be expected I guess. What is surprising is a word that was in this very spot less than two weeks ago but is not even discussed now. The word ‘halving’ does not appear at all.

The word “fears” is also prevalent in the image above, as is “decline, stocks and epidemic,” so it’s quite clear that the fear is there. And if the price action is not enough to signify the contraction of market sentiment, we can also see that the amount of funds currently being deployed in DeFi smart contracts is also declining rapidly.

Hoping things will turn around soon. I wish you a safe and healthy day. Don’t forget to share this post and subscribe if you haven’t already, and don’t forget to wash your hands !!

Best regards,

Greenspan dead

Analysis, Advice, Money Management

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