The collapse of the Bitcoin price and the upward reaction that followed. The parallel movement with stock markets and Tether's role as the "pivotal" of news

Everything had been in the crypto market for the last 24 hours, until the early hours. A thriller in full swing, with constant peaks in his agony.

But let's start from the beginning, starting at noon yesterday, when Bitcoin saw its biggest percentage decline in 7 years. Fears over the spread of coronavirus have triggered a new wave of sales in all markets. Nothing has stood up, with Wall Street's main indicators slipping higher than in 1987. On the Euro markets, the Stoxx 600 index plunged 11.48%, marking the biggest decline in its history. Even the gold reached 5%. The CBOE Volatility Index, the so-called fear index, broke all historical records from scratch. Its highest point since the outbreak of the previous crisis in 2008 was at 59.8 points. Yesterday it touched 75.47 points.

What makes matters worse is the collapse of markets, despite the intervention of the Central Banks at a brave price. At times, the "magic" words spewed by the lips of powerful central bankers: interest rate cuts, liquidity injections, asset purchases, quantitative easing to reverse the climate.
This was not enough, we had noted in the previous days. It is not banking this time around, so it can help the "print" decisively. It is about the "real" economy, production. Products, labor and wealth production are missing. Extra money offers no solutions. So no one can rule out the worst-case scenarios. Why; Because we miss the most important variable in the equation: the rate of spread of the disease, which no one knows about.

Coronavirus proves to be much more serious than the flu and far more contagious. However, the fact that the majority of the population has not yet been ill is leading experts to speculate that the situation is likely to get worse. The question is how fast.

The problem is not the absolute number that will stick in the coming years. This game was lost. The point is how fast they will stick, which determines the degree to which individual state health systems can cope.

Returning to Bitcoin, where after midnight Europe seemed to break the brakes. An unprecedented wave of sellers sent it from $ 5,750 in just under 3 hours to under $ 4,000. And above all, everyone watched in despair ... the cavalry trumpeted. A huge wave of buyers started the counterattack and raised it within 2 hours to 5,600. Almost from where it started. To put it in percentages, it dropped 33% and then rose to 48%!

All this from 12 in the evening until 5 in the morning, is a record in the volume of transactions. Of course, we had similar movements in other cryptocurrencies. We knew that the crypto market and Bitcoin occasionally fluctuated sharply, but this time they were beyond themselves. The explanation is that Bitcoin is fighting on its own. It does not expect any support, as the stock markets have the Central Banks. But on the other hand, this is also his strength. It is not based on inflationary money. And of course they are the most honest. If it fails, the taxpayers do not pay the damage, as is the case with the banking sector.

What is striking, however, in terms of traders, apart from the sharp fluctuations that offer opportunities and impressive profits (as well as huge losses), is how well the technical analysis works in this market. As we can see in the above 15-minute chart of Bitcoin, the levels of support and resistance we set yesterday were meticulously precise. At this time, Bitcoin is at $ 5,400.

What was the sign that we would have cavalry intervention? The Tether. Tether is a stablecoin, that is a cryptocurrency that is locked into the dollar. A Tether corresponds to a US dollar, so under normal circumstances its value is stable, very close to 1. As we can see in the 15-minute chart, its price at the time of the counter ... reached 1.05! What does this mean; That Tether suddenly became more valuable than the dollars it covers? Of course not.

There are two explanations: The first is that many who sold Bitcoin and other cryptocurrencies did not convert them into dollars or euros in order to get them out of the market. They kept them in Tether so they were ready to buy. The second is that new fresh money has been introduced into some exchanges that do not accept fiat currencies but cryptocurrencies. And Tether is usually the first to buy a currency at a fixed rate until they decide to buy.

As we have said many times, the crypto market is exciting, but it has particularities over traditional markets. It is silly to get into trouble without your basic knowledge. And of course, it's not for everyone.

There will be books written about the events taking place in the financial markets these days. The density of events imposes a distortion of duration. Time is measured in units of time only on the basis of a multitude of events.