Black swans landed on the cryptocurrency market

• Bitcoin attempts a recovery, but the upside momentum is weak.
• Experts believe that the market is plagued by black swan events.

While Bitcoin may be fine in the long run, the short-term situation looks worrisome even for strong cryptocurrency supporters. The first digital asset dropped to $7,633 on Monday amid major sell-off on the financial markets caused by oil price war between Russia and Saudi Arabia. At the time of writing, BTC/USD is changing hands at $8,110, off the recent low. However, the upside momentum is not sustainable enough yet. BTC/USD has gained about 1.5% in recent 24 hours, while its market share edged above 64.0%.

BTC move above $8,000 may be considered as a positive signal, however, as we have already reported, a cluster of trades placed around $8,700 may stop the recovery and push the price back towards the support area. 

BTC/USD daily chart

Bitcoin critics rejoice

A weak recovery provokes many critical comments from Bitcoin bashers like Peter Schiff who came up with another batch of negative comments, pointing out that Bitcoin could not be regarded as a secure store of value or compared to gold. He also emphasized that Bitcoin had no meaningful use cases.

Bitcoin was created after the 2008 financial crisis and hodlers always assumed that it would be the safe-haven of choice during the next. Looks like they assumed wrong. If #Bitcoin is not a currency, not a store of value, and not a safe haven, then what is it and why own it?

This is something that could have been expected from someone like Schiff, who is a longstanding Bitcoin hater; meanwhile a cryptocurrency trader Willy Woo also believes that the situation is abnormal for the market. Recently, he shared his views on Twitter, saying that the industry was suffering from a black swan events.

This is a chart of on-chain “investor activity” right now. Long term looks solid. Short term is very weird, normally it’s smooth oscillations, not anymore, it’s like something hit it (#COVID19?), it’s fizzing out. Waiting for this to reverse before we put in a bottom. Maybe soon.

Notably, John Bollinger and Brian Armstrong from Coinbase were also shocked to see the market react like this. According to the creator of a famous technical indicator, Bitcoin should not have behaved like this.

Bitcoin falls victim to the COVID-19 panic. I truly did not see that coming, I thought it might act as a safe haven asset.

However, many experts point out that Bitcoin is only 11 years old, which means that it may not be as widely trusted as gold to withstand such calamitous times.