{"id":10890,"date":"2022-05-18T03:23:24","date_gmt":"2022-05-18T03:23:24","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/analysts-note-parallels-with-march-2020-will-this-time-be-different\/"},"modified":"2022-05-18T03:23:26","modified_gmt":"2022-05-18T03:23:26","slug":"analysts-note-parallels-with-march-2020-will-this-time-be-different","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/analysts-note-parallels-with-march-2020-will-this-time-be-different\/","title":{"rendered":"Analysts note parallels with March 2020: Will this time be different?"},"content":{"rendered":"
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Analysts in both crypto and traditional markets have noted some startling similarities between the recent downturn and the one caused by a pandemic panic in March, 2020.<\/p>\n

The real question is whether it\u2019s the start of a larger downturn or if there will be a significant bounce-back as in 2020 that led to an extended bull run in both crypto and stocks markets.<\/p>\n

Podcaster and author of The Pomp Letter, Anthony \u201cPomp\u201d Pompliano is on the permabull side of the ledger, tweeting on May 18 that since March 1, 2020 when one Bitcoin cost about $8,545, \u201cBitcoin is up 340%.\u201d<\/p>\n

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Bitcoin is up 340% since March 1, 2020.<\/p>\n

As central banks around the world devalued their currencies at a historic rate, there is only one asset that stood out from the pack.#bitcoin<\/a> is the savings technology that shields billions of people from undisciplined monetary policy.<\/p>\n

\u2014 Pomp (@APompliano) May 17, 2022<\/a><\/p><\/blockquote>\n

Among those hopeful of a turnaround is investment firm Real Vision\u2019s CEO Raoul Pal who believes Bitcoin markets have been painting a pattern that shares traits with the March 2020 crash. <\/p>\n

In his May 13 episode of Raoul Pal Adventures in Crypto, Pal explained that with the downward price action last week, Bitcoin (BTC) may have \u201cshot straight down\u201d to the bottom of the current wedge formation and is now in a range that will eventually lead to another rise in price. He said, <\/p>\n

\u201cThat was exactly the kind of pattern we had in March 2020.\u201d<\/p><\/blockquote>\n

On March 12, 2020, investors panic-sold many assets, including Bitcoin, as fear about how the market would be impacted by the COVID-19 pandemic and global lockdowns. On that day, Bitcoin fell 45% from $7,935 to $5,142 according to CoinGecko. <\/p>\n

The current decline in traditional markets has led to a loss of $7.6 trillion in market cap from the tech heavy Nasdaq, in non-inflation adjusted terms, more than the dot-com bubble and the March 2020 sell-offs.<\/p>\n

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The numbers are obviously not adjusted for inflation but still mind-blowing to see in this context. pic.twitter.com\/aHem93mhpo<\/a><\/p>\n

\u2014 Mati Greenspan (@MatiGreenspan) May 17, 2022<\/a><\/p><\/blockquote>\n

The Crypto Fear and Greed Index plunged to 8 on May 17 which is the lowest since March 2020.<\/p>\n

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#Crypto<\/a> fear & greed index is at 8 out of 100.<\/p>\n

The lowest number since the COVID-19 crash in March 2020. pic.twitter.com\/jKVTcjrXV1<\/a><\/p>\n

\u2014 Micha\u00ebl van de Poppe (@CryptoMichNL) May 17, 2022<\/a><\/p><\/blockquote>\n

The 50 day moving average (MA) of financials, real estate, and technology investments is close to the overwhelmingly oversold levels seen just over two years ago. Respectively, in March 2020 those levels were 0, 0, and 1 compared to 2, 3, and 4 so far in May based on data from Fidelity Investments. In a May 18 tweet<\/a>, Fidelity\u2019s own Director of Global Macro Jurrien Timmer called March 2020 \u201cone of the most oversold setups in the history of the market.\u201d<\/p>\n

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Managing partner at The Future Fund Gary Black pointed out on May 17 that Tesla (TSLA) is trading at a 20% discount, the widest from analyst target price since March 2020. He added that \u201cOver the next 12 months, $TSLA rose 660%.\u201d<\/p>\n

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The last time $TSLA<\/a> traded at this wide a discount (25%) vs the avg Street PT ($984) was in March 2020, at the height of the Covid crisis. Over the next 12 months, $TSLA<\/a> rose 660%. Source: https:\/\/t.co\/5fcVwWX78i pic.twitter.com\/z2AHe5zkVi<\/a><\/p>\n

\u2014 Gary Black (@garyblack00) May 16, 2022<\/a><\/p><\/blockquote>\n

The S&P 500 Index also displays similarities as it recorded a 52-week low of 3,930 on May 12 only to bounce back to 4,088 by market close on May 17. Chief Market Strategist for financial research firm LPL Research observed in a May 18 tweet that the last time the index had done that was in March 2020.<\/p>\n

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The S&P 500 just made a 2% gain in two of the past three days coming off of a 52-week low.<\/p>\n

The last times that happened?<\/p>\n

March 2009 and March 2020.<\/p>\n

\u2014 Ryan Detrick, CMT (@RyanDetrick) May 17, 2022<\/a><\/p><\/blockquote>\n

Before traders get too excited, market conditions are very different now, with rising inflation and interest rates. Back then, governments reacted with unprecedented support packages to prop up prices. Reuters reported on May 14 that the strong bounce in the market in 2020 was fueled by what it called an \u201cunprecedented Fed stimulus.\u201d <\/p>\n

Analyst and author of the Rekt Capital Newsletter, Rekt Capital tweeted<\/a> on May 17 that BTC \u201cis entering a period of outsized opportunity\u201d based on analysis of the Log Channel which he says resembles what happened in March 2020. However he\u2019s not clear if we\u2019ve bottomed out yet.<\/p>\n

Related: <\/em><\/strong>Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5K<\/em><\/strong><\/p>\n

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Last time #BTC<\/a> lost the Log Channel was in March 2020<\/p>\n

This is when $BTC<\/a> also dipped below the blue 200-SMA<\/p>\n

Log Channel clearly shows BTC is entering a period of outsized opportunity<\/p>\n

But does price need to drop as low as to the 200-SMA to completely bottom?#Crypto<\/a> #Bitcoin<\/a> pic.twitter.com\/hTxwfWYdkH<\/a><\/p>\n

\u2014 Rekt Capital (@rektcapital) May 16, 2022<\/a><\/p><\/blockquote>\n

As of the time of writing, Bitcoin is up 1.1% over the past 24 hours trading at $30,545.<\/p>\n<\/div>\n