US in “Deep Trouble” As Outbreak Returns, Will The Market Response End Bitcoin’s Rally?

The United States has barely begun to reopen its economy and it already experienced a resurgence of the pandemic. The last time cases spun out of control, it was Bitcoin and the stock market’s undoing.

Cases are rising in the South and the Western parts of the country, erasing nearly two months’ worth of preventative measures. How will markets respond to the return to quarantine and increasing infection rates?

Health Care Officials Warn: The United States Is In “Deep Trouble”

While Northern states are seeing dramatic results from strict lockdown conditions, cases in the South and West have been climbing.

This week, the United States reported the highest increase in total reported cases of the outbreak since April.

The United States has the largest death toll out of the entire global community. However, health officials claim that people are just getting “complacent.”

Related Reading | Economist Warns of Warp Speed Dollar Decline, How Will Bitcoin Respond? 

Dr. Don Williamson, head of the Alabama Hospital Association, adds that there “is nothing that I’m seeing that makes me think we are getting ahead of this.”

Another healthcare professor Dr. Joseph Gerald, of the University of Arizona, claims “we are in deep trouble” as a nation.

Infectious-disease expert at the Baylor College of Medicine in Texas, Dr. Peter Hotez, doesn’t believe a vaccine will provide the “rescue” that the world expects.

Rapid Resurgence in Pandemic Could Crush Bitcoin, The Stock Market, and the Dollar

The United States is only at the beginning stages of reopening its struggling economy. Stimulus and money printing left and right has kept the economy and stock markets afloat.

But it can’t save the health care system nor can it fight a virus.

With fear returning, cases rising, and all that uncertainty looming over markets, another crash could be ahead.

The last crash came about when markets first learned of the potential impact the pandemic was going to have. With another wave of the virus starting, another wave of selling is likely.

Related Reading | Bitcoin’s Perfect Storm On The Horizon As Analyst Calls For ‘Inevitable’ Dollar Collapse 

Ahead of the selloff, CBOE’s VIX index predicting market volatility based on the S&P 500 began to rise. VIX recently fell back below a level that appears to trigger a surge in the metric.

However, starting about two weeks ago, a spike in the VIX broke through that level again, and it is currently holding.

The correlation between VIX, the S&P 500, and Bitcoin can be seen in the chart below.

bitcoin btcusd sp500 united states

If the stock market experiences another strong selloff, Bitcoin’s correlation will likely carry the asset lower as well. How markets will react beyond that is anyone’s guess.

The initial panic from dealing with the unknown has worn off but left behind a weakening dollar and US economy. The dollar’s weakness has left it vulnerable to competing currencies, as well as Bitcoin.

Making matters worse, the country has erupted with civil unrest and widespread protests. These protests often neglect social distancing measures and are attributing to the growing number of cases.

All of the uncertainty and other underlying political and economic factors point to more downside in financial markets in the days ahead.

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Source: Newsbtc

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