After the deep sell-off in the past two days, the crypto market is back to rising. Bitcoin is trading above $5,000 after falling to $3,700.

On March 12th, BitMEX CEO Arthur Hayes wrote an article where it talked about how despite trading below $8,000, the world’s leading digital currency outperformed most global equity indices this year.

But as we saw Bitcoin price dropped over 52% in the past two days, however, according to Hayes we won’t be revisiting $3,000 and the “max pain probably resides somewhere between $6,000 to $7,000 Bitcoin.”

Everything is getting sold-off

For the past month, US stocks have been on a decline, experiencing their worst single day drop since 1987 amidst the fears about the economic impact of coronavirus (Covid-19). However, the stock market wasn’t the only one affected; gold, treasuries, and Bitcoin, all fell during this period.

This is because investors are looking to get their hands on cash as Hayes noted, during these times “the fear and uncertainty facing humanity is enough to inspire a global margin call,” and for any crypto hedge fund to dump their coins into a falling market which further pushes the prices lower.

“As the stocks were sitting on their limit down, trading halted, and unable to fall further, investors wanted to free up capital before Lagarde’s speech,” explained analyst Mati Greenspan. “The evidence of this is that many other commodities also sold off at the exact same time. Here we can see gold, platinum, palladium, gasoline, and sugar all plummeting around the same time, some of them even worse than BTC.”

Nowhere to hide

Gold prices fell to 2.5 monthly low, down 8% from its seven-year high of just above $1,700. The yellow metal is on track to post its biggest weekly drop since about 2013.

“If gold’s being sold to raise cash in an emergency, which is what appears to be happening now, then it is doing its job as a safe heaven,” said Brien Lundin, editor of Gold Newsletter.

However, a weakening dollar, falling bond yields, and falling economic growth are expected to help push the bullion prices higher in 2020.

In a similar fashion, bitcoin falling doesn’t mean it isn’t a safe heaven. The crypto asset is trading like a risk-on asset but still possesses the properties of becoming a store of value asset.

According to Greenspan, it’s just people rushing to liquidity and Bitcoin is still a safe heaven but “when it comes to central banks’ and governments’ policy, and inflation, and many other types of things like that,” but not “against global economic turmoil.”

In an interview with Modern Consensus, the analyst explained that investors are more concerned about freeing up capital in turmoil. As a result, today, all the markets are selling-off and “there is nowhere to hide” amidst the selling pressure following the reports that President Donald Trump was set to declare a national emergency to tackle the coronavirus.

US dollar is not sound money

Currently, bitcoin is trying to bounce off while the stock market initially jumped 5% on the back of the Federal Reserve pumping nearly $200 billion in the market.

This is also a positive thing for bitcoin as central banks printing money means gold and bitcoin will appreciate in value, said Hayes adding “Bitcoin should enjoy a nice run back through $10,000 towards $20,000 by year end.”

Injecting liquidity into the system also means, “US dollar is not sound money,” while further increasing the risk of high levels of inflation. Not to mention, by printing so much money, the government is “illegally stealing the wealth of the bottom 50% of Americans,” said Anthony Pompliano.