Traders are panic-selling their crypto holdings, expecting prices to fluctuate wildly as the U.S. and China settle old scores with tariffs. Around $20 billion was wiped off the crypto market last week when Donald Trump announced 100% tariffs on China.
As the economic giants lock horns, the crypto traders fear and start to panic-sell their crypto holdings. Since volatility is what can be seen as far as the eye can see, traders have shifted their attention and have moved their funds into metals, like Gold and Silver.
Fear creeps into the market
CoinMarketCap’s Fear and Greed Index moved into the fear zone after being in the neutral zone last week. From last week’s value of 54, the index crashed into the fear zone, reading a value of 28. This indicator, which gauges the appetite of the market, takes into account social media trends, market dominance, and other factors.
Crypto market cap crashes to $3.5 trillion
On October 6, the total crypto market cap reached $4.33 trillion, up from $3.27 trillion on September 25. However, the hopes of a successful ‘Uptober’ soon diminished with the tariffs. The market cap crashed much quicker than the time it took to cross the $4 trillion mark. The total crypto market cap is at $3.59 trillion, after crashing by 17% in just 12 days.
$500 million leaves crypto derivatives
The derivatives fund also started to hemorrhage. Funds leaked out of crypto ETFs, with more than $587 million leaving the market. Investors moved out more than $530 million worth of funds from Bitcoin ETFs, while ETH ETF investors sold more than $50 million. Compared to the outflow in BTC, the money flowing out of the ETH ETFs was less. It could be because the traders still think that the altcoin season might give some pump to Ethereum and other alts.
Traders find safe haven in Gold
So when the crypto market is bleeding, where are all the funds being moved to? Into metals. Investors are currently finding metals to be a safe commodity to invest in.
Gold has become a safe haven for many investors, and it continues to rise at an exponential rate. Currently, the XAU/USD trading pair is priced at $4,223, with Gold reaching an all-time high.
The demand for this metal has been so high that, despite the relative strength index (RSI) indicator signalling overbought conditions, the price never stopped increasing. Hence, the RSI has been residing in this zone for an extended period.
However, a crypto netizen, observing the OTHERS/XAU trading pair, found out that a 2019 bullish setup is recurring on the charts now. The present setup is similar to the setup back in 2019-2021, where this pair appreciated drastically. During those times when this shape appeared on the charts, the RSI indicator reached the oversold region, after which the crypto OTHERS(crypto).
So what does this mean now?
Historically, when the RSI reached the oversold region, it was followed by a massive surge. With the altcoin season overdue and Gold’s cool-off also overdue, the netizen expects that there could be a spike in altcoins in the coming days.
