Bitcoin’s steady price gains over the past few days ended Friday. With the halving in the rearview mirror, cryptocurrency traders could consider the impact of a continued global economic slowdown after new data showed retail sales dropped to record lows and unemployment numbers continue to worsen.
The world’s first cryptocurrency is trading below its 10-day and 50-day moving averages, a bearish technical indicator. At press time, BTC was trading down 3.4% over 24 hours at $9,340 00:00 UTC Friday (4 p.m. ET). Bitcoin had experienced steady gains since May 13, yet stumbled in early trading at 02:00 UTC Friday, quickly dropping 5%. Since then, bitcoin clawed back some gains but continues to trend downward.
“Outside events are much more likely to impact bitcoin’s price, like a possible crash of the economy” because of COVID-19, said Alessandro Andreotti, an Italian over-the-counter cryptocurrency trader.
Uncertainty still exists in equities amid the coronavirus pandemic, and stock markets have performed poorly this week on the murky economic outlook. Data confirmed that: a drop in retail sales by 16.4% in April, the worst since 1992, and U.S. unemployment claims up over 36 million in the same period.
The S&P 500 U.S. stock index closed down 2.2% for the week, its worst performance since late March. In Europe, the FTSE 100 index of largest publicly traded companies ended trading down for the week 2%. For Asia, the Nikkei 225 of Japan’s largest companies ended the week down overall for the first time since April.
However, not all traditional assets are performing poorly. “Gold and silver are looking strong,” said Rupert Douglas, head of institutional sales at crypto asset manager Koine. Gold is up 2.8% for the week.
“I think bitcoin will be strong,…