Bitcoin It has been crashing after failing to retain the $ 11,000, and it could be thanks to negative sentiment surrounding a crashing stock market that is taking down the crypto market as a whole.
Here’s why things could get really bad for Bitcoin and the rest of the crypto space if major US stock indices continue to slide.
Major US stock indices S&P 500, Dow Jones, fall into quadruple witchcraft yesterday
The S&P 500 is down more than 7% from local highs. The Dow Jones Industrial Average is also down 5% from its recent local high, performing slightly better than the Standard and Poor’s index.
The stock market is falling and falling hard after several major stock indices set new all-time highs last month.
However, as soon as the month turned, the shares were down, as did Bitcoin.
The top crypto asset by market cap actually led the market dump in nearly 24 hours, but the stock market followed closely, and has since taken over as the main driver behind the downside momentum.
To make matters worse for Bitcoin and the rest of the cryptocurrencies, there is the fact that the current correlation between the disruptive asset class and traditional stocks has yet to be removed.
The correlation, if stocks see another Black Thursday-style slide, could drag Bitcoin further lower.
Bitcoin Could Fall Back To Black Thursday Lows If Stocks Fall Again
The leading cryptocurrency by market cap set a local high at $ 12,400, but has since collapsed. After a valiant defense by the bulls, to stay strong at support below $ 10,000. The cryptocurrency quickly found itself trading at $ 11,000 again.
However, the recent rally may have been a further bearish test of support turned resistance, just in time for the stock market to carry the crypto market lower.
The reason for the sudden increase in turmoil in the stock market could be due to a creepy-sounding event called Quadruple Witchcraft.
This quarterly expiration of stock options and futures can cause an explosion in stock volatility, and that could be what causes stocks to drop suddenly.
If the slide becomes severe in stocks, Bitcoin is at risk of another Black Thursday rate drop to new lows. The added risk of the upcoming election, profit-taking, portfolio rebalancing, and panic from another round of the pandemic could also be to blame.
Whatever the case of the bearish turn, stocks could end up taking the Bitcoin once again.
Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and / or services. This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest.