With the crypto markets reeling from another sharp move to the downside, analyst Jacob Canfield is issuing a new warning to fellow traders. Canfield says three bearish narratives may continue to hound Bitcoin (BTC) and offer a true test of its status as a store of value.
First and foremost, the analyst says the ongoing economic fallout from the coronavirus is likely the number one factor driving the crypto market selloff, as investors reduce exposure to traditional assets as well as emerging markets.
Case in point: The S&P 500 is down over 17% from its all-time high recorded on February 19. Meanwhile, Bitcoin has plunged by more than 23% over the same stretch.
This is the first true test for #Bitcoin as a store of value in the face of an economic recession.
Only time will tell if it will hold up.
— Jacob Canfield (@JacobCanfield) March 8, 2020
Another narrative that may impact Bitcoin’s price is potential hoarding of BTC from miners that power the network.
Canfield points to multi-asset Fund Manager Charlie Morris who explains why miners tend to avoid selling into a weak market.
Lastly, Canfield says the PlusToken Ponzi scheme is also testing demand for Bitcoin.
The thieves behind the scam stand accused of dumping millions of dollars worth of cryptocurrency on the open market since the summer of 2019.
Bitcoin hit a yearly high of $10,406 on February 13th. It has since fallen 25% to its current price of $7,785.