Analysts in both crypto and traditional markets have noted some striking similarities between the recent downturn and the one caused by the March 2020 pandemic scare.
The real question is whether this is the start of a bigger recession, or whether there will be a sharp rebound like 2020, leading to a continuation of the bull market in the crypto market and the stock market.
Podcast host and author of The Pomp Letter, Anthony “Pomp” Pompliano sided with the dead bulls, tweeting on May 18 that since March 1, 2020, the price of one bitcoin has been around 8,545 Dollar, "Bitcoin up 340%."
Bitcoin is up 340% since March 1, 2020.
As central banks around the world devalue their currencies at a historic pace, only one asset stands out. Bitcoin is a savings technology that protects billions of people from unregulated monetary policy.
— Pomp (@APompliano) May 17, 2022
Raoul Pal, chief executive of investment firm Real Vision, is among those hoping for a turnaround. He believes that the Bitcoin market has been depicting a trend that has characteristics in common with the March 2020 crash.
In his Raoul Pal Adventures in Crypto on May 13, Pal explained that with last week’s price drop, Bitcoin (BTC) may have gone “straight down” to the bottom of the current wedge pattern and is now in a range that will eventually causing prices to rise again. He said,
"That's exactly the kind of pattern we encountered in March 2020."
On March 12, 2020, investors panic-sold many assets, including Bitcoin, amid concerns about how markets would be affected by the COVID-19 pandemic and global lockdowns. On the day, bitcoin fell 45 percent from $7,935 to $5,142, according to data from CoinGecko.
The current decline in traditional markets has wiped $7.6 trillion off the tech Nasdaq's market cap, more than the dot-com bubble and the March 2020 sell-off on a non-inflation-adjusted basis.
Those numbers obviously don't take inflation into account, but they're still shocking in that context.
— Mati Greenspan (@MatiGreenspan) May 17, 2022
On May 17, the Crypto Fear and Greed Index plummeted to 8, its lowest point since March 2020.
#Cryptocurrency Fear and Greed Index at 8/100.
This is the lowest number since the COVID-19 outbreak in March 2020.
— Michaël van de Poppe (@CryptoMichNL) May 17, 2022
The 50-day moving average (MA) for financial, real estate and tech investments is near overwhelmingly oversold levels from two years ago. In March 2020, those levels were 0, 0 and 1, compared to 2, 3 and 4 so far in May, according to Fidelity Investments. In a tweet on May 18, Jurrien Timmer, global director of macro at Fidelity, called March 2020 "one of the most oversold moves in market history."
Gary Black, managing partner of The Future Fund, noted on May 17 that Tesla (TSLA) is trading at a 20% discount, the widest gap to analysts' target price since March 2020. "Over the next 12 months, TSLA is up 660 percent," he added.
The last time TSLA saw such a large discount (25%) was in March 2020, at the height of the Covid-19 crisis. Over the next 12 months, TSLA USD gained 660%.
— Gary Black (@garyblack00) May 16, 2022
The S&P 500 also showed similarities, as it hit a 52-week low of 3,930 on May 12 but bounced back to 4,088 by the close on May 17. The last time this happened in the index was in March 2020, the chief market strategist at financial research firm LPL Research observed in a May 18 tweet.
The S&P 500 has just recovered 2% from its 52-week low in two of the past three days.
When was the last time this happened?
March 2009 and March 2020.
— RyanDetrick, CMT (@RyanDetrick) May 17, 2022
Before traders got too excited, market conditions are much different now with rising inflation and interest rates. At the time, the government launched an unprecedented support package to prop up prices. Reuters reported on May 14 that the market's strong rally in 2020 was driven by what it called "unprecedented Fed stimulus."
Analyst and author of the Rekt Capital newsletter, Rekt Capital tweeted on May 17 that based on an analysis of the Log Channel, BTC is “entering a period of great opportunity,” which he said is consistent with what happened in March 2020. resemblance. But he doesn't know if we've bottomed out.
Dollar. 800,29 Up 1.1% in 24 hours, trading at
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