The ECB is putting together an unprecedented crisis package to mitigate the damage to the economy caused by the corona crisis. The bond purchase program could have devastating consequences on the stock markets. The Bitcoin price (BTC) and the crypto market may recover somewhat from the massive slumps of the past few days.
The latest developments of the Corona crisis and the impact on traditional markets and the Bitcoin ecosystem.
The international situation
Now that travel in Europe has ceased and public life is already at a standstill in many countries, large parts of production in the EU have also come to a standstill. More and more companies are having to temporarily close down their operations to protect their employees: The economy stands with its back to the wall. The ECB is trying to counteract the threat of recession with a historic aid program.
The 750 billion euro bond purchase program
The European Central Bank is taking drastic measures to combat the economic consequences of the corona pandemic. As the ECB recently announced, a bond purchase program with a volume of 750 billion will be implemented.
With the crisis program, the ECB is reacting to the tensions on the bond market and can now buy practically anything to calm the markets - from government bonds, corporate bonds to corporate loans. For example, the currency guardians could now also buy Greece's sovereign debt, which was blocked due to low creditworthiness. As a result, stock market trading is unlikely to be suspended after all, as the ECB is completely opposed to the market. There are signs of a coming power struggle between the market and the central bank.
Automotive industry stops production
Following Daimler and VW, BMW is now also suspending production in Europe and South Africa until 19 April. The company is expecting a decrease in demand due to the corona crisis and therefore has to cut back production. With the plant closures of the three car giants, a whole economic engine comes to a standstill in Germany.
The US car companies General Motors and Ford have also temporarily stopped production in the USA to protect their employees. It is expected that Fiat will follow suit and also stop the assembly lines.
Infection rate continues to rise
The number of cases continues to rise, also in Germany. As of this morning, 8,198 infected persons were confirmed. In Italy, the corona crisis reached a sad peak with 4,200 new infections and 475 deaths in one day.
While Europe is just at the beginning of the epidemic, China seems to have already overcome the worst. For the first time since the outbreak, no new infections with the virus have been reported in the country. China and other Asian countries have taken early measures to delay the spread of the virus.
Germany's Chancellor Merkel urges solidarity
During the daily press conference, Lothar Wieler, President of the Robert Koch Institute (RKI), once again appealed to the citizens to implement the agreed measures and reduce social contacts to the bare minimum. This is the only way to delay the rapid spread of the virus. In order to trace the movements of the citizens and thus the dynamics of the spread, the RKI is now evaluating anonymised mobile phone data.
Chancellor Merkel also called for solidarity in a speech to the German population. She also assured that the supply of important goods will remain assured and that there will be no shortages of food and other supplies.
The Chancellor also assured companies of extensive financial support. This is intended to cushion the damage that the Corona pandemic is doing to the economy.
Tumultuous stock markets
The situation on the stock markets remains tense. On Tuesday, March 17, the DAX lost ground once again, falling by around 5.56 percent to 8,441 points. This means that since the beginning of the corona crisis in February, the losses of the leading German index have amounted to almost 40 percent at more than 5,100 points. At the beginning of the new trading day, however, the DAX was able to gain 78.87 points, catching up with a slight gain of 0.93 percent to 8,520 points.
The US stock markets also continue to be gripped by a panic mood and closed yesterday's trading day with losses. The Dow Jones dropped back below the 20,000 point mark in the course of trading and closed at 19,898 points with a loss of 6.3 percent. When the stock markets opened, the Dow Jones lost 1,338 points compared to the previous day.
The oil price also reached historic lows on Wednesday, 18 March. The price of a barrel of American WTI fell by 17 percent to just over 22 US dollars a barrel. The price of gold began the day at the same rate as the previous day and currently stands at USD 1,484.17.
Crypto market: Crypto currencies are catching up again
The crypto market seems to be gradually recovering from the harsh losses of the last few days. For example, the prices of the largest crypto currencies in terms of market capitalization are showing slight gains compared to the previous day. The panic wave of sell-offs, which dragged the entire market down with it, seems to have subsided for the time being. However, the price development in the coming days depends largely on the crisis management of the Corona pandemic and thus on a silken thread. Only when the measures now taken to slow down the spread of corona have taken effect can normality return to the crypto market.
Despite the losses and market turbulence, Frank Wagner, CEO of the INVAO Group, still sees an opportunity for the crypto ecosystem in the current situation.
A few words about the Bitcoin course
And further, the Bitcoin course is moving sideways in the Triangle Pattern, which has been followed since March 12. Accordingly, on a daily level, the situation remains neutral, it will have to be seen whether the Bitcoin price can break through the strong resistance described by the moving average of the last 200 weeks.
Overall market situation
The pandemic, however, has taken the crypto market to the ground with full force. At present, however, prices are rising slightly overall and recovering from the heavy losses. The visualisation of the overall market of coin360 is therefore once again in green.