Bitcoin sold off sharply on Thursday, testing the key 10,000 level as the US stock market experienced a major rout the same day. The Nasdaq closed down by 5%, while the Dow Jones Industrial Average ended the day down by more than 800 points. Analysts pointed to deteriorating US-China relations taking the shine off tech stocks, which could suffer from a potential increase in tariffs.
The world´s largest cryptocurrency by market cap has enjoyed an impressive bull run since March when it traded as low as 3,874. Bitcoin, other cryptocurrencies and equity markets have all been boosted by the massive stimulus and money printing by central banks across the globe, deployed to offset the damage to economies caused by Covid-19.
The latest data from Johns Hopkins University shows that global Coronavirus cases have risen to 26,324,219 with a total of 869,076 deaths. On Thursday, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious diseases, told CNN that the arrival of Covid-19 vaccine by October remained “unlikely,” though it was possible.
Looking at the Bitcoin daily chart we can see that a bearish head and shoulders pattern has formed and price has broken through the neckline. A decisive move below the major psychological level of 10k would embolden the bears and bring the 9,079 level into view.