The population is only gradually becoming aware of the effects of the coronavirus and is creating more and more panic. How things will continue on the stock markets in the next few days, and how the Bitcoin price could develop

Currently, there is a lot of talk about the coronavirus and its influence on the financial markets. Especially with Bitcoin and co. a dispute has arisen about the narrative of the safe haven. Why not only the Bitcoin price, but also Ethereum and Ripple have dropped significantly in the last few days has already been discussed in detail from many sides. Now it is a matter of classifying further developments around the so-called "corona crash" and putting them into a context with the financial market events.

The next few days at the Crypto and in the traditional financial market could be as follows

If you took a closer look at the stock markets on 12 March, you noticed that you had to suspend trading in some cases. For example, stock trading on the Milan stock exchange was literally paused. The decline in the Euro Stoxx 50 would certainly have been much greater without the suspension of Italian shares from trading. It is possible that at the beginning of next week, if the free fall on the stock exchanges continues, other stock exchanges will also close or at least pause trading temporarily.

At this point, a strength of the crypto-economy becomes apparent: trading will not be suspended. Selling Bitcoin & Co. is possible at any time, which is also currently revealed by the up and down on the crypto market.

Italy could be the trigger for a banking crisis and put massive pressure on the euro exchange rate

Probably the highest risk in the European banking system at present is posed by Italian banks, which are the least viable in a European comparison and already depend on enormous public subsidies to avoid collapsing. This fact is risk enough, but on top of that, Italy is unfortunately the country in the eurozone that has suffered most from the corona virus.

Even with a cautiously optimistic outcome of the "Corona crisis", the bad debt losses at Italian banks would be so great that they would not be able to survive without additional aid. However, it is virtually certain that there will be further help for banks. On 12th March the ECB decided to put an additional 120 billion euros into bond purchases. In addition, cheap loans are to encourage banks to grant more loans. However, the past has shown that banks can only be tempted to grant loans at all in such a risk environment to a limited extent.

The announced ECB measures with a downright homeopathic effect are a wake-up call to the states. The message is that we central banks cannot do much more, only the state can still actively stimulate the economy. However, this will not change further central bank measures in the coming days.

Bitcoin in the next 30 days

Technical indicators currently play a rather subordinate role. On the one hand, all support lines have been broken by the price drop, and on the other hand, a panicked investor has little interest in the moving average of the last 200 days. The markets will therefore continue to fall as long as the panic at the wheel is also present. Since this panic can continue for several days, I expect prices to continue to fall, despite small countermovements or breathers.

Some investors with sufficient cash are taking advantage of the favourable prices to buy additional shares. Overall, however, the financial market panic predominates, from which anti-cyclical stocks such as gold or even Bitcoin cannot be excluded.

I think there is little reason for Bitcoin and co. to worry

A positive aspect is that the selling pressure does not come from the crypto ecosystem, but from the real and traditional financial economy. While a Lufthansa or Daimler share has to correct fundamentally justified, this is not the case with Bitcoin. In contrast to listed companies, Bitcoin falls due to panic reactions rather than fundamental factors. Consequently, a fairly strong countermovement can be expected as soon as the panic flattens out.

If the volatility decreases again somewhat, this could be the best time this year to buy Bitcoin and co. So if you have enough cash on hand, you can buy Cryptos at bargain prices. If the worst is over by Bitcoin Halving in May, the countermovement to the top should get a boom-like upswing.