{"id":425577,"date":"2020-05-29T17:00:58","date_gmt":"2020-05-29T17:00:58","guid":{"rendered":"https:\/\/uniquehot.com\/?p=425577"},"modified":"2020-05-29T17:42:32","modified_gmt":"2020-05-29T17:42:32","slug":"sp-500-sell-bitcoin-black-thursday","status":"publish","type":"post","link":"https:\/\/uniquehot.com\/news\/sp-500-sell-bitcoin-black-thursday\/","title":{"rendered":"S&P 500 Sell Signal May Drag Bitcoin Back Toward Black Thursday Lows"},"content":{"rendered":"
The lingering correlation between Bitcoin<\/a> and the S&P 500 may be soon coming back to haunt the cryptocurrency market if a chillingly accurate sell signal sends the major US stock index tumbling back towards Black Thursday lows.<\/p>\n Could the correlation cause the same for the first-ever cryptocurrency?<\/p>\n Prior to the historic Black Thursday collapse<\/a>, the S&P 500 and many major stock indexes set a record for a new all-time. Before the quarter ended, however, a record was set for the worst quarterly close in stock market history.<\/p>\n At the same time that the S&P 500 was tapping highs, Bitcoin<\/a> was trading at above $10,000 \u2013 a key level said to be the remaining resistance between current levels and a retest of the asset’s all-time high set back in 2017.<\/p>\n During that time, Bitcoin price reached $20,000, then later fell to as low as $3,200.<\/p>\n Related Reading | Strong Correlation Between Bitcoin and Stock Market May Finally Be Over\u00a0<\/a><\/strong><\/em><\/p>\n The Black Thursday collapse that crushed the S&P 500 also sent Bitcoin tumbling from $10,000 back to under $4,000. There was no escaping the liquidity crisis as the investment community realized a recession was more than likely as a result of the pandemic.<\/p>\n Since then, a strong correlation has remained between the S&P 500 and Bitcoin<\/a>. The major US stock index and the leading cryptocurrency by market cap both have made a sharp, V-shaped recovery \u2013 a sign that often indicates a bottom is in.<\/p>\n Fears of a false bottom are mounting, however, and an accurate sell signal triggering on the S&P 500 may cause another retest of Black Thursday lows, or worse. And due to the correlation that Bitcoin<\/a> continues to share with the index, any downside in the stock market could spill into the cryptocurrency yet again.<\/p>\n Economic stimulus packages have kept stock valuations high, and stimulus checks have provided investors with additional funds they don’t mind risking on crypto assets like Bitcoin.<\/p>\n Related Reading | New COVID-19 Lockdown Proposal Poses Unique Threat to Bitcoin\u2019s Ongoing Momentum<\/a><\/strong><\/em><\/p>\n While all of this has helped the S&P 500 and Bitcoin’s recovery from lows, it may not be enough to keep markets afloat for the long term. Uncertainty surrounding any economic reopening<\/a> plans are leaving investors skeptical about returns, and fears of inflation are causing investors to rethink their holdings.<\/p>\n This could benefit Bitcoin as the asset becomes more looked at as a hedge against inflation like gold, but for now, the cryptocurrency remains more correlated to stocks than the precious metal market.<\/p>\n <\/p>\nBitcoin’s Continued Correlation With the S&P 500 Could Lead to Repeat of Black Thursday<\/h2>\n
Is The Recovery In These Two Markets Sustainable With Stimulus?<\/h2>\n