On the back of remarkably fast recovery from the virus, which has taken over 210,000 American lives, President Donald Trump abruptly ended talks with Speaker Nancy Pelosi and Democratic leaders over new economic aid packages.
All three major U.S. stock indexes lost solid gains from earlier in the day and fell into negative territory after the announcement, and crypto-asset markets followed suit, indicating that they have become more correlated to stocks and less to gold in recent months.
$10 Billion Market Cap Slump
Total market capitalization has declined around $10 billion over the past 24 hours. The move took markets down from $335 billion to just below $325 billion.
However, on the monthly view, they are still within a range-bound trading channel and have yet to plunge to monthly lows of around $310 billion.
Bitcoin led the retreat as usual in a sharp fall of 2% from $10,750 to $10,530 over just a couple of hours. Since then, the king of crypto has recovered a little to trade at $10,600.
Crypto analyst ‘CryptoHamster’ has identified a bearish divergence on the daily time frame with repeated testing of the 100 days moving average.
— CryptoHamster (@CryptoHamsterIO) October 7, 2020
It has been observed by several analysts that Bitcoin volatility and trading volumes are extremely low at the moment, which is usually a precursor for a bigger move ahead.
This minor dip cannot be considered, so a dump back into four figures is looking more likely to happen in the short term.
Elsewhere on Crypto Markets
As usual, the altcoins are getting hit harder and are responsible for most of that market cap loss over the past day or so.
Ethereum has fallen back to its lowest level for almost two weeks in a 5% slump to just below $335 before recovering marginally to reclaim the $340 level. Ripple’s XRP has lost a similar amount as it slides back to $0.245, while Binance Coin has declined to $27.40.
Polkadot and Chainlink have been two of the day’s biggest losers, declining around 7% apiece. Only EOS has been able to buck the trend in the crypto top twenty and post a gain of 6% on the news that Google Cloud will join the community to become an EOS network block producer.