Bitcoin plunges, Oil back to pre-pandemic levels: Market News

bitcoin price update

Bitcoin Slides

Bitcoin fell by as much as 15% on Sunday while other cryptocurrencies such as Ether and XRP also plunged.

On Wednesday, Bitcoin reached a higher-than-$64,000 new record high amidst crypto-related enthusiasm sparked by Coinbase’s debut on the stock market and its listing on Nasdaq.

On Monday, Bitcoin trades around $57,000 and prices seem to have steadied. However, the current prices remain about 12% lower compared to last week’s peak.

What caused the fall?

Analysts can’t pinpoint one single reason as for cryptocurrencies, buyers and sellers cannot always be identified. Specialists believe the following list of reasons contributed to the fall:

Regulation Concerns: As interest grows, regulators intensify their efforts for crypto regulations.

Crypto Hype: The overexcitement over Coinbase’s listing caused the prices to skyrocket and inevitably fall.

Specific Factors: Power outages in China reduced mining capacity and consequently, the processing power of crypto networks as well.

Oil Recovers

In the commodities world, after last week’s data, oil has been recovering to pre-pandemic levels so far this month. “Commercial oil inventories across the OECD are already back to their five-year average,” said Ed Morse, head of commodities research at Citigroup Inc.

The oil price is hovering near $67 a barrel, a very optimistic figure for those involved in the sector, but with a hint of concern for the auto industry and policymakers about inflation. However, according to Citigroup forecasts, Brent crude is expected to reach $74 per barrel in the second half of the year.

In any case, even if the figures are optimistic thanks to the mild economic recovery and massive vaccination, there are still some reserves. Among these reserves is the coast of the Chinese province of Shandong (which could be used to feed some refineries, according to the consultancy IHS Markit Ltd). There are also reserves in India and Brazil, where recovery seems to be a little slower because of new outbreaks.

What to look out for during the week:

Today, Monday a new trading week begins and the economic calendar only has a few highlights. Be on the lookout for some minor releases in Japan including industrial production m/m; trade balance and adjusted trade balance, imports, and exports. Also, the housing data will be released in Canada while the services index will be released in New Zealand.

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