A strong wave of risk-on flow emerged yesterday following reports that Pfizer’s COVID vaccine candidate prevented 90% of infections in the latest study.
As a result, the equities market surged higher, with the German DAX index trading up over 5% and US markets moving nearly as high at the open, while gold fell dramatically from $1,960 to just shy of $1,900 level.
As the session progressed, gold continued to head south before stabilising in the mid-$1,800 zone, while the tech heavy NASDAQ100 index underperformed its peers.
In the Markets
Interestingly, given the recent correlation with equities, Bitcoin’s immediate price action has been much more-choppy and the spot rate eventually fell below $15,000 before rebounding. This is likely an indication of hot money movement rather than fundamental rotation out of digital assets and into equities.
As such, while the long-term Bitcoin bull market is unlikely to be derailed, short-term upside may temporarily slow as some capital is put to work in equities. In addition to that, the strong bounce by Bitcoin also reinforced the notion of strong institutional demand as per the recent uptick in the AUM by the likes of Grayscale, 21Shares EPT and others.
Also of note, after the initial bout of volatility, ETHBTC stabilised and despite the recent focus on BTC, the pair did not show bias towards BTC outperformance which suggests that ETHBTC may look for higher levels.