The stock market just had its worst one-week correction since the global economic recession, with Bitcoin and gold falling in tandem.
Is the fact that these once uncorrelated assets are suddenly all collapsing together in unison a signal that a greater global economic meltdown is on the horizon?
As the Stock Market Crashes, Bitcoin and Gold Follow
Global markets are experiencing the biggest shakeup in over a decade on the heels of the coronavirus possibly reaching potential pandemic status.
The virus is spreading rapidly, the death toll is rising, and the world is only just starting to feel the impact that a widespread pandemic would have on the greater global economy.
In just one week, over $6 trillion was wiped out from the stock market, with top indexes like the Dow Jones Industrial Average, NASDAQ, S&P 500, and many more, suffering the worst one-week performance since the last recession.
Related Reading | S&P 500 Crash Resembles Illiquid Altcoin Crypto Whale Dump
The selloff across the stock market sparked a selloff in the crypto market after the asset class grew by over 50% year-to-date.
Bitcoin fell from highs around $10,000 to as low as $8,400.
Gold, an asset that typically performs well during times of economic distress, also had a massive correction that took the price of the asset from. $1,690 to $1,550.
Gold is considered a safe-haven asset, and a flight of safety for investors when disaster hits the economy.
Bitcoin shares many of the same attributes as gold, potentially making it an ideal vehicle for capital during downturns, however, the asset may be too young to realize that potential.
Can the Coronavirus Cause a Total Economic Collapse?
Instead, Bitcoin and crypto, like the precious metal and the stock markets, have been falling like a rock following the coronavirus escalation.
What’s most unusual, is the fact that this highly uncorrelated, and even anti-correlated assets, are suddenly performing in a strangely similar fashion.
Not only were all assets falling together, but they all bounced at a similar depth, and even closed the last three days with a morning star doji, depicted by a red candle down, a doji, then a green candle back upward. The same candle structure can be found on the DJI, XAU/USD, and BTC/USD price chats.
The pattern typically signals that the drawdown will go no lower than the doji in the center of the formation, however, given the strength of the coronavirus-related selloff, it is difficult to trust even what is typically a reliable signal.
Related Reading | Has the Coronavirus Put an End To the Bitcoin Safe Haven Narrative?
With the economy on the brink of collapse, the fear across the market is so strong that anything is possible, and it is even causing uncorrelated assets to plunge all at once.
