The market crisis due to the virus and the correlation of cryptocurrencies with gold. Because Bitcoin is durable. What the technical analysis shows?

Stock markets are collapsing all over the world. Investors have been shocked by the effects of the spread of coronavirus. Not unjustified. As it turns out, the danger is not just China. Not even Asia. Events in Italy have begun to worry even the most optimistic. They sparked fears that economic activity would freeze in Europe as well.

Bonds and gold are the winners. We will focus on cryptocurrencies. What impact will a potential general economic and stock market crisis have on them? A difficult question, with even more difficult answers. To make an effort.

Let's start with the 4-hour chart of Bitcoin. As we can see, the panic did not affect it. The green horizontal support line has withstood, although we have seen lower bottom and lower peaks form a week. Indications that the upward movement started at the beginning of the year show signs of saturation. However, the formation seen from the parallel blue lines in the Technical Analysis manuals is called a "flag" and is theoretically used to driving prices upwards.

In the yellow diagram we have put the price of gold. The resemblance in terms of its direction in relation to Bitcoin is evident. Their main difference is not in the direction but in the rates of rise. Since the first outbreaks of the virus, Bitcoin has been 2 to 3 times larger.

So all right? Have we found the solution? All our money on Bitcoin? Not yet. To survive in investing, one must first understand, if not love, the relative and the uncertainty. Accept the complexity of causality. Otherwise he loses his time. And his money. Let us first consider the opposite view, which is not optimistic at all. He believes that investors will look to get rid of the riskier assets, preferring safer financial products. Also in times of great recession, the first costs incurred are those of research. Consequently, the rate of growth in the field of new technology may be reduced.

In a panic, sales do not follow a chill and pre-planned strategy. Logic is not always a prerequisite. Driving into a recession, it means that the standard of living is falling, and therefore the investment income available. And not only that. Investors liquidate in order to meet their needs or obligations, also dropping the crypto market. Especially altcoins, which are considered a high risk placement.

The benefits of crypto are that the exchanges are open at the weekend. Investors will be able to act immediately if something extraordinary happens. They won't have to sell on Monday and embarrassed to start with a huge gap!

Until recently, the only alternative was gold. But now there's Bitcoin. Even more than gold does not depend on fiscal policies, natural disasters, deadly epidemics, interest rate fluctuations, unemployment rates, inflation, wars. When the Central Banks start printing as if there is no tomorrow, many investors will start looking for assets that cannot be inflated.

As time goes on, Bitcoin reveals what it is: an emerging value storage medium. Many assure us that we should treat it as digital gold. I am not referring to the cryptocurrency community but to international mainstream financial media, such as CNBC. Why do they claim it? Because it is rare in its nature and resistant to inflation. But why not opt ​​for authentic gold and get Bitcoin intangible? One key reason is that strictly investing, the gold prospects are limited, of Bitcoin's, no.

In any case, I cannot imagine that those who are serious about investing are going without an alternative strategy in such uncertain times. In an environment of uncertainty, risk is an investment opportunity, as long as you realize it in time, reading the current economic situation rationally and without prejudice. Success will not be judged by a trade, a strategy, an upward or downward cycle. Failure, however, may be due to this.