It is undeniable that the coronavirus is also having serious consequences in the markets. Many offices are closed and employee trips are prohibited; the Italian stock market is losing more than 3%; the Btp-Bund differential is 180, while banks suffer even more than values.
In this scenario, the consequences are also affecting the cryptocurrencies that in the last days marked new declines, although this is the first time that a external factor to markets as a social health crisis impacts the economic context.
Fortunately, compared to recent days, the stock markets are recovering: the Dow Jones is now at + 5.10%, while the cryptocurrency volumes are rising again with + 40% of daily transactions from yesterday morning levels and with a Bitcoin market at + 2.5%.
Even eToro reported yesterday that short positions are increasing + 10% in view of the accumulation, but also to reduce the volatility of the total portfolio.
Edoardo Fusco Femiano, an eToro market analyst in Italy, said:
«In response to the strong correction in recent days, two phenomena are observed. The first sees investors increasing short positions, mainly to cover bullish positions and reduce overall portfolio volatility. Short positions have increased 10% over the past week, with S&P 500, DAX 30 and Dow Jones being the most traded indices. The second phenomenon refers to the most patient investors, who have been showing a Slow accumulation of bullish positions in US blue chips, such as Apple and Microsoft, and also in Bitcoin., despite price drops. In general, despite volatility, people continue to seek long-term value, with the aim of containing the high volatility of this phase. It should also be noted that the CBOE volatility index, also known as the fear indicator, has reached the highest level since 2011 ″.