Plunging oil price presents an unexpected risk to the crypto market in April

Plunging oil price presents an unexpected risk to the crypto market in April

Plunging oil price presents an unexpected risk to the crypto market in April

The oil price is plummeting rapidly, dropping to as low as $5 in Canada.

The dumping of additional supply by Saudi Arabia and Russia is expected to rattle the oil market further in April, which may cause high-risk assets including stocks and crypto to drop off. Over the next several weeks, JPMorgan expects oil-rich sovereign wealth funds to vamp up their cash-buffer as the dispute between Saudi Arabia and Russia intensifies. A large sell-off of stocks at a time during which the U.S. stock market has just started to recover from recent lows could fuel the next leg down of equities. If crypto-assets continue to demonstrate a high level of correlation with the U.S. stock market, cryptocurrencies could also feel the pressure imposed by the declining oil market.

High probability the Dow Jones recovery is short-lived, prompting more crypto investors to be cautious

Throughout March, the U.S. stock market has dropped off substantially as fear towards the coronavirus pandemic worsened. According to, the U.S. has surpassed 160,000 in confirmed coronavirus cases, forcing major companies in the likes of Macy’s to lay off the majority of their workforce. The Federal Reserve’s projection of 47 million jobless claims in 2020 and the negative economic impact of the coronavirus pandemic is expected to apply significant selling pressure on U.S. stocks. In recent weeks, the crypto market has shown that cryptocurrencies are not immune to a global economic slowdown. When investors frantically start selling all types of assets including gold, crypto-assets remain highly vulnerable to a downturn.

JPMorgan strategist Nikolaos Panigirtzoglou said:

“It makes sense for sovereign funds to frontload their selling, as you don’t want to be selling your assets at a later stage when it is more likely to have distressed valuations.”

A sell-off of an additional $75 billion in stocks, as estimated by the Sovereign Wealth Fund Institute, may slow down the effect the $2 trillion Senate stimulus package has had on the U.S. stock market.

Holger Zschaepitz, market analyst at Welt, said:

“Global stocks mixed as volatile quarter comes to an end and Hedge Fund redemptions could spark another rout. Significant bounce in China’s PMIs helps sentiment. US & European Futures little change.”

Oil price continues to plummet, leaving stocks and crypto more vulnerable (source:

Low volumes, rejection of same resistance levels

Both CME and spot exchange volume indicate that there is generally lacking buying demand for crypto assets at this time. The Bitcoin price has been unable to recover above $6,900, primarily due to the large number of sell orders stacked in the $6,900 to $7,100 range. After $6,900 was initially rejected, Bitcoin tested $6,600 and $6,500 each with a lower daily volume, which demonstrates that at this time, there is limited appetite from investors to reenter the crypto market. Many investors are sitting on the sidelines to wait for a better opportunity to enter into the crypto market, and at a period like this, the cryptocurrency market is often at risk of seeing another phase of consolidation.

Article Produced By
Joseph Young

Analyst at CryptoSlate

Joseph Young is a finance and tech journalist. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

Own A Piece Of Markethive — Lifetime Income Opportunity
Markethive, the first Social/Market Network built on the Blockchain, introduces The Entrepreneur Program
The Entrepreneur program is designed to leverage your system. Your free Markethive system is a market network, like a social network, but with powerful inbound marketing tools integrated into the system. This premier hybrid social network includes news feeds, blogging platforms, video channels, chat channels, groups, image sharing, link hubs, resume, profile page and peer to peer commerce. But more than a social network, we have also delivered to you “Inbound Marketing tools” like broadcasting, capture pages, lead funnels, autoresponders, self-replicating group tools, traffic analytics, and more. Plus, we are built on the Blockchain which allows Airdrops of 500 Markethive Coin (MHV) upon joining and micropayments for using the tools mentioned above. This is all free to you.

The Entrepreneur program is designed to add gold plating to an already stellar and unbelievably valuable system you receive for free.

The Markethive Coin — MHV Consumer Coin
Notably, MHV was listed on the first of many exchanges, including its own exchange [in development] in March in 2019 and is currently valued at $0.20. The Markethive coin will not be dependent upon speculative value as is the case with other cryptocurrencies and platforms, thereby creating eternal economic velocity in the entrepreneur ecosystem within Markethive.
Andries van Tonder.