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BTC nosedives on risk aversion

Bitcoin advanced 3.19% to $58,960 on Thursday, November 25. Yesterday was a holiday in the US (Thanksgiving Day). Major currencies, alongside cryptocurrencies, corrected upward against the dollar. By the close, the BTCUSDT pair rose to $59,390.

Asian trading today kicked off with a decline in the BTC price. Stocks experienced their steepest pullback in three months. Since the opening of the European session, major equities are down by an average 6% to $54,350. Brent tumbled 5.7% to $77.50. Antipodeans also retreated sharply. S&P 500 futures slid 1.86% to 46,11.50. The euro and gold have been trending higher so far today as the UST10Y yield narrowed.

Investors are spooked by news that the WHO convened a special meeting to discuss a new variant of the coronavirus and confirm its status. This is a version of the B virus, 1.1.529, which was identified in South Africa. It has 32 mutations in the spike protein and could be vaccine resistant.

News about the new Covid strain prompted investors to bail out of risk-sensitive assets and rotate into safe haven bonds, the yen and the franc. The market is pricing in future border closures and another hit to the global economy. Australia and New Zealand have been hammered by harsh lockdowns, so these currencies took a pummeling today.

Over the past 12 hours, long positions worth $514 mln have been liquidated. Sellers pushed the price action down to two-month lows. This opens the dollar for a run down to $50.7k (trendline from $29,278) and $50.8k (61.8% Fibonacci level of the ascent from $39,600 to $69k). A close of the daily candle today above $56,250 could quell the downtrend for the time being.


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