The price of Bitcoin is primed for the next big decline, but this is not just about Bitcoin. The US has just surpassed China in the highest number of confirmed Coronavirus cases. This is an important development and it means that we may now be looking at the beginning of another downtrend in the S&P 500 (SPX) which could once again put financial markets under pressure. The 4H chart for BTC/USD shows that the cryptocurrency market has plenty of room to decline. In fact, at this point it would not be surprising to see it decline even below $3k near-term.
That being said, this whole situation with the Coronavirus and all this doom and gloom ought to normalize soon because in my opinion it is close to reaching its peak. We now have Prince Charles and Boris Johnson confirmed to have COVID 19 as well. Sooner or later a cure or a solution is likely to come out and I think we would then be done with this correction and markets would begin to rally potentially in summer. However, for now the situation remains volatile and we can definitely expect further downside in equities and cryptocurrencies. The oil market might also take a hit because of the US leading Coronavirus cases.
It is important to realize that all of this is not really about the Coronavirus. This situation might normalize soon and I don’t think we could see a recession just yet. I think the real catalyst that would bring about the next major depressed similar to that of 1929 would be a political event. That would most likely have to do with the Treaty of Lausanne that saw WWI end and the Ottoman Empire collapse. With the treaty set to expire in 2023,