Market Meltdown: Bitcoin, Equities, and Oil in a Tailspin

A Tumultuous Week for Financial Markets

It’s a classic case of market meltdown this Monday, where investors are waking up to find their portfolios looking like they’ve just been through a blender. Equity markets across Europe have plummeted by a nerve-wracking 8%. Oil prices are taking a nosedive, slumping 30%. And just for good measure, the crypto markets decided they’d join the party, as Bitcoin took a $1,500 hit over the weekend. Talk about a bloodbath!

Bitcoin: The Unexpected Underperformer

In a twist that nobody saw coming, Bitcoin isn’t exactly rising like a phoenix amid economic instability. Instead, it appears more like the sad little bird that can’t seem to get off the ground. During the rollercoaster ride over the last two weeks, Bitcoin had its hopes pinned on breaking through the elusive $9,150 level. But like a toddler at a candy store crying after being denied, it backtracked to $7,500 faster than you can say “cryptocurrency crash.”

Resistance Levels: The Unfriendly Neighbors

The crypto chart has become a landscape of resistance levels that seem to be hoarding all the good vibes. It was supposed to rally, but now it just finds itself with upper resistance at $8,200 and $8,500. If Bitcoin flirts with these levels and gets rejected again, we could be looking at further downswing—possibly testing the robust fortress of $7,300-7,500.

Weekend Drop and the Notorious CME Gap

Amid all the drama, the weekend marked the creation of a massive CME gap in Bitcoin trading. According to the charts, around 95% of gaps tend to get filled, giving traders some false sense of hope. As luck would have it, that gap at $7,600 was fulfilled, creating a scene reminiscent of an old western showdown. While major gaps like $9,900 and even $11,600 remain open, they’re looking as likely to be filled soon as I am to win the lottery before my morning coffee.

Gold vs. Bitcoin: A Battle for Safe Haven Status

If you thought Bitcoin was the undisputed “digital gold,” think again. Gold has been flexing its muscles during the ongoing economic chaos, climbing 11.50% in 2020, while Bitcoin lags behind at a modest 8.50%. Who knew the shiny metal could throw shade at the supposed champion of alternative assets? During a bearish market, investors flock to liquidity, often selling off Bitcoin first to weather the storm.

What Lies Ahead?

The total market cap has taken a significant hit, rejecting a crucial $300 billion resistance. With support levels languishing in the $185 to $205 billion range, a requisite test of these levels is on the horizon. Could we see a short-term upward bounce? Maybe, if we diagnose the market correctly. But for our beloved Bitcoin, a return to the $7,300-7,500 zone seems inevitable. Will there be a ray of sunshine ahead? Only time will tell, but it appears traders will continue holding their breath as we await market signals from both equities and cryptocurrencies.