• U.S. oil futures in May see "negative oil price" for the first time in history

• Bitcoin price continues to weaken, seeking support in the short term

• Bitcoin and crude oil have no correlation in the long run

Entering 2020, the world has never been peaceful. The new crown epidemic has ravaged the world, leading to economic shutdown. The U.S. stock market has ended a ten-year bull market and then plummeted rapidly. The safe-haven value of gold has become prominent. Digital assets such as Bitcoin have also suffered heavy losses. , People jokingly say: Every day witnesses history!

U.S. crude oil futures in May showed "negative oil prices" for the first time, and global oil supply and demand are out of balance

On the 20th (this Tuesday), the price of light crude oil futures for May delivery on the New York Mercantile Exchange, which will expire on the 21st, rarely fell into a negative value. During the session, the price of light crude oil futures for May delivery on the New York Mercantile Exchange fell by US$60, with the lowest price hitting -40.32 US dollars per barrel, a drop of more than 300%. The cost of getting to the refinery or storage already exceeds the value of the oil itself.

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Figure 1: K-line chart of NYMEX crude oil futures in 2006-Oriental Fortune

On the whole, we believe that the plunge in oil prices is caused by many factors:

First of all, the May futures contract is about to expire, and the delivery date of the May U.S. crude oil futures price is April 21. Investors transfer their positions to the June contract. When the futures contract moves to another month, the price usually jumps. .

In addition, limited crude oil storage capacity is also an important factor affecting oil prices. U.S. inventories have soared to record highs, and this summer will face the test of "nowhere to store oil" due to the exhaustion of oil storage facilities. Storage tanks in Cushing, Oklahoma, are now 69% full, up from 49% four weeks ago, according to the U.S. Department of Energy, as U.S. storage facilities quickly fill up. Under such circumstances, crude oil producers can only reduce oil production in the next few months and reduce crude oil prices in recent months, reduce inventories, reduce production costs, and drive oil prices further down.

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Bitcoin price continues to weaken, seeking support in the short term

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Figure 2: OKEx BTC/USDT Spot Daily K-line Chart-AICoin

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Bitcoin and crude oil have no correlation in the long run

Bitcoin, as the "digital gold" in the encrypted world, has always been compared by the market with the traditional financial safe-haven asset - gold. So what is the impact of the crude oil market, which is also a commodity, on the encrypted market?

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Figure 3: Crude Oil VS BTC 1D-Tradingview

The above figure can show that in the long run, the correlation between Bitcoin and crude oil is not great, and there is basically no positive correlation between rising and falling in the same time period, and there is no negative correlation between one ebb and the other. However, due to the influence of the general market environment, it is not ruled out that there is synchronization between the price changes of crude oil (WTI) and Bitcoin within a short period of time.

Therefore, we cannot predict the price of Bitcoin through the change of crude oil price. The price change of crude oil is affected by the joint action of both supply and demand factors. Similarly, the price change of Bitcoin is not only affected by changes in its own supply and demand relationship , and to a certain extent will be affected by the market environment.