Bitcoin: How to prevent a dusting attack?
The correlation between Bitcoin and the S&P 500
With the appearance of COVID-19 in the world, the general conditions and premises of the world economy have taken a 180° turn. As a result, we have seen events that seemed distant before.
Since the end of March, the trend in Bitcoin prices and the S&P 500 index has shown a surprisingly similar correlation. The latter can be verified by analyzing the data provided by Skew, which shows that the price of Bitcoin recovered along with the U.S. stock market.
Similarly, Bitcoin began to plummet in the first week of June when stocks fell.
Therefore, some institutions and experts have begun to suggest that what is seen in the stock market from now on, could be replicated in the cryptomoney market.
The latter would call into question the argument and raison d’être of cryptomonies. It is assumed that these were created to be a safeguard against the crisis of traditional markets.
Coronavirus and Bitcoin price: Is it really a refuge of value?
What can we expect from the BTC?
Some financial analysts within Wells Fargo are talking about a possible strong liquidation within the stock market in the near future.
If we follow the premise of the apparent correlation between Bitcoin Era and that market, we could say that BTC could be the victim of a strong correction.
However, we should look at the performance of the BTC and ETH options that are due to expire soon. Options contracts give investors the right to buy Bitcoin at a specific price and date that was previously agreed upon. As they expire, there could be an increase in buying and selling volumes and a sharp increase in volatility.
Also, as many know, this would not be the only factor capable of influencing the price of Bitcoin in the short term. Since Halving, there has been talk of the role that miners play in this. If they suddenly come under selling pressure, it can also lead to a correction in the valuation of this cryptomone currency.