Bitcoin (BTC) has failed to maintain the momentum with which it has started off 2020. While it did surpass $10,000 a couple of times, it failed to hold and drop down to monthly lows taking the entire market down with it. Last week, BTC’s price climbed to a daily high of $9, 215, but quickly flipped, falling to $8, 960 and losing 2.15% on a regular basis. Now, BTC has tumbled close to 10% in the past 24 hours and is trading at $7816 as of the time of writing.

Recent sell-off sparked by global events

The massive sell-off in the cryptocurrency market is now being attributed to Russia’s refusal of Saudi Arabia’s deal that wanted to cut-off production of oil to 1.5 million barrels per day. This in return saw Saudi cutting off oil prices for China by almost $7 per barrel. Adding to this, Saudi further increased its oil production by 2 million barrels.

In response to the oil war, the Brent crude futures dropped close to 30% to $31.02 per barrel, its lowest level since February 2016. While stocks and cryptocurrencies declined, the price of gold rose substantially. The price reached $1,700 per ounce, the highest level since December 2012.

This was all amidst growing Coronavirus fears to the global market, and how this outbreak could affect the price of Bitcoin. The sharp drop in price earlier this weekend has largely been linked to the rapid spread of the deadly virus. $3.6 trillion in crypto value and $48 billion were wiped out from the stock and crypto markets, respectively.

The market capitalization of the entire crypto market was down $26.43 billion from the previous day. Hence, Bitcoin plummeted down, losing a substantial amount as fears regarding the events drove prices down. Apart from BTC, top altcoins like ethereum (ETH), XRP and bitcoin cash (BCH), have all dropped percentage losses in double figures.

Despite the losses, on March 8, Crypto analyst PlanB noted that according to the latest version of Bitcoin’s stock-to-flow forecast “btc still spot on S2F track.”

#bitcoin S2F chart adjusted for today's "crash" … nothing really happened, btc still spot on S2F track pic.twitter.com/7bIaZpWgLB — PlanB (@100trillionUSD) March 8, 2020

Stock-to-flow is a measure of where Bitcoin should go based on its existing supply. The ratio of stocks versus the new bitcoin entering circulation marks 2021 as the year when BTC/USD would supposedly hit $100,000. As of now, the average of the 10-day and one-year stock-to-flow values is around $7,600, which is what PlanB’s model calls for.

Miners under pressure

Furthermore, bitcoin is dropping at a time when the network’s total hashing power and the mining difficulty is set to touch new highs. With higher difficulty and a declining BTC price, mining farms that are using older mining equipment are set to face a tough time ahead. Reports from mining pool poolin, reveals that the most popular mining rigs namely the AntMiner S9 and Avalon 851 are all operating at breakeven point.

About the difficulty adjustment, PlanB’s tweet read: