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Rare Gap Sends Bitcoin Down as Stocks Struggle

Rare Gap Sends Bitcoin Down as Stocks Struggle

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Bitcoin has suddenly shown a rare gap of $80 in the one minute candle charts for Coinbase.

The sudden fall, although relatively slight, suggests something might have changed, with what that is exactly being unclear at this point.

*Bitcoin gap, March 2020 Chart from Tradingview.*

As bitcoin trades 24 hours across the globe, price gaps are very rare and almost non existent.

In traditional markets if price opens substantially higher or lower during the weekend, so creating a gap, it suggests the situation has changed, that there’s some event.

What that might be is not too clear currently but stocks were recovering a bit by 2.5%, yet they’re now kind of struggling more near 0.5%, while in Italy they are down another 2.5%.

It seems the situation in New York is getting worse, with some private schools closing there.

It’s been very cold in New York with temperatures there for the past few weeks being ideal for corona.

This is also a very international city so it has probably been spreading for three months, with the state now starting to do widespread testing.

The weather there is getting a bit warmer, but it takes about two weeks for corona to go through its course.

Seeing the lockdown in Italy people are naturally getting worried now, but interestingly in Germany there has been only two deaths out of more than 1,200 cases because they classify it as due to corona only if there is no underlying condition.

It’s not clear however how many have had to be hospitalized, but 2 out of 1,000 suggests a rate similar to ordinary flu for otherwise healthy people, although there might be a lag as usually it takes two weeks for clarity.

Unmeasurable Economic Impact

The temporary suspension of ordinary life in Italy and other places is expected to have significant impact on the economy with two British banks offering deferment of mortgage payments or conversion of capital mortgages to interest only for those affected. While in Italy the government has suspended mortgage payments.

Countless of events across the world have been cancelled either by the organizers or in some cases national or local governments.

Planes are flying empty apparently, with February-March not usually a big holiday season but people might be canceling plans maybe as far as May.

However, President Xi has visited Wuhan to show things are now under control in China and thus everything can get back to normal.

Meaning this can be contained, and with a more springy climate it should hopefully become far less of a problem.

The problem being hospital space. It is already peak flu season, although now it should hopefully start becoming less peak, with that common season by itself usually putting hospitals under some stress.

The addition of these new cases, it seems to be about 10% that need hospitalization in Italy, adds to this strain and therefore makes medical care for other more ‘ordinary’ visits a significant challenge.

So containing the spread is important even if it affects the economy or inconveniences for the next 2-3 weeks, but of course a balance needs to be struck as a recession or worse can also be damaging to the population.

Meaning parties, cinema and the rest should wait for the next two-three weeks. Work attendance is necessary for plenty but in the tech sector especially it would be a lot more enjoyable to work from home.

Basically for a bit now maybe just do what they doing in Italy. Go out if necessary, with necessary being also shopping or work if you have to attend, but not just for fun.

That way maybe the spread can slow until spring and so we don’t risk gov measures in other countries, but that makes it challenging for many sectors that rely on entertainment or travel.

However as their financial troubles would be due to this hopefully very temporary thing, you’d expect banks or others to take that into account, and if necessary maybe even the government, or the market, can loan to them presuming otherwise they are financially sound.

So hopefully it shouldn’t have drastic effects, but it’s not too clear how long it would take for this to go back to normality, and thus how quickly activity can rebounce.

Going by China’s example it was mid-January to now mid-March, so about two months. The outbreak in Italy began near the end of February after a significant cold spell in the north.

As it is near the end of winter it should hopefully last far less in Italy, and hopefully elsewhere we can maybe just about keep it at bay with voluntary reduced outdoor activity, especially in areas where it is cold with 8-10 degrees being what this thing likes.

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