Image: iStock

Bitcoin (BTC) struggled to turn $6,000 into support during trading on March 12 as the second “Black Monday” event in the same week pushed stocks to perilous lows, Cointelegraph reported.

Cryptocurrency market daily overview. Source: Coin360

Data from Coin360 and Cointelegraph Markets showed BTC/USD trying and failing to recapture $6,000 after shedding 20% in a single hour.

Donald Trump’s travel ban set the scene for a coronavirus panic attack on bitcoin markets, with the cryptocurrency crashing to 10-month lows of $5,720.

On an hourly time frame, the event marked bitcoin’s worst performance on record.

At press time, those lows remained, BTC/USD trading in a roughly $400 corridor as Wall Street faced another day’s losses.

Cryptocurrency market daily overview. Source: Coin360

Trading ceased for 15 minutes after stocks shed 7% upon opening Thursday morning in New York. The Dow Jones fell 9%, while the S&P 500 rapidly lost 9%.

After trading began in London, the United Kingdom’s FTSE 100 index hemorrhaged value – as one commentator noted, were it to close at press time levels, the FTSE would have had its worst day since the 1987 “Black Monday.”

‘Digital gold’

Bitcoin’s performance came in for criticism from familiar faces. Gold bug Peter Schiff claimed that its downturn on the daily meant it could hardly stand up to the title of “digital gold” — the precious metal lost a comparatively modest 2.5% on the day. 

For supporters of bitcoin, however, it was central banks’ response to the crisis which proved most difficult to swallow.

A raft of stimulus packages surfaced from governments, based around the idea of flooding markets with liquidity conjured from thin air.

Twitter user Hodlonaut, creator of 2019’s Lightning Torch transaction relay, summarized, “Translation: We will print harder than we have ever printed.”

Cointelegraph Markets analyst filbfilb meanwhile urged caution. Pointing to bitcoin’s mempool, which showed significant volumes of coins circulating, he argued that betting on recovery was too risky at present.

“I just can’t be long while I know there is so much BTC in transit,” he told subscribers of his Telegram trading channel.

Blame OPEC

Meanwhile, Forbes reported that bitcoin’s sudden sell-off was put down to global market turmoil sparked by oil cartel OPEC’s failure to agree to a supply cut, sending the oil price to historic lows, but some think bitcoin’s move lower could have its origins elsewhere

“The sudden drop in prices seems to arise out of the selling of [bitcoin] by PlusToken,” the chief executive of India-based cryptocurrency exchange, Ashish Singhal, told bitcoin and crypto industry news site CoinDesk.

PlusToken, a Ponzi scheme that swept China and Korea over the last few years, saw around $2 billion worth of bitcoin and other cryptocurrencies stolen from investors. 

Last Saturday, ahead of the traditional market rout caused by Opec, PlusToken scammers moved a little over $100 million worth of bitcoin to so-called mixers, designed to disguise the origin and destination of the coins. 

The fraudsters may have then sold off the bitcoins, causing prices to fall as supply flooded the market, according to Singhal.

The bitcoin price fell by almost $1,000 per bitcoin on Saturday, before stock markets and other assets crashed. 

“PlusToken Scam Moved Another 13,000 Bitcoin’s Yesterday,” bitcoin and cryptocurrency analyst Kevin Svenson said via Twitter on Sunday. 

“They also did something similar after bitcoin crossed above $10,000 this year. They are slamming the market with sell orders. Essentially we have a giant whale unloading after every move up.”

Bitcoin has been battling against falling trading volumes and stalled adoption in recent months (though that’s not stopped some from betting big on the number one cryptocurrency).

When trading volumes are low the market is more susceptible to manipulation by big traders. 

Many have taken the latest fall in the bitcoin price as proof it is failing to act as a so-called safe haven – an idea that had gained popularity in recent months as bitcoin rose in the face of escalating US-Iran tensions and then apparently gaining on fears the coronavirus could knock global trade.

Traditional safe-haven assets, such as gold and the Japanese yen, usually move higher in times of greater risk and uncertainty.

“Bitcoin is down 8% in the last day, much more than global equities,” Nobel prize-winning economist and outspoken bitcoin critic, Nouriel Roubini, said on Sunday night via Twitter.

“Another proof that bitcoin is not a good hedge versus risky assets in risk-off episodes. It actually falls more than risky assets during risk-off.”