Categories: Bitcoin

Traders Expected Bitcoin to Rise as Stock Market Fell, What Went Wrong?

The sudden plunge in the price of Financial markets had a major fall on Wednesday.

Medha Samant, investment director for Asian equities at Fidelity International, further emphasized that the global stock market sell-off spooked sentiment amidst fears that US markets would succumb to sell pressure after one of the longest bull rallies in the history of the country.

Alex Kruger, a cryptocurrency analyst and trader, said that a breakout of Bitcoin above a major resistance level in a period in which stocks are experiencing a large drop in value could allow the dominant cryptocurrency to see a massive increase in demand.

“A BTC breakout today, in a day when stocks and bonds are getting crushed, would be noticed by the whole world and would be very bullish. Waiting,” he said.

However, Kruger also noted that the correlation between stocks and traditional assets like gold and treasuries has also weakened in the past year. Thus, a struggling global market could also lead the crypto market to fall.

Kruger added:

“Treasuries and Gold are two assets widely used as portfolio hedges. Correlations with stocks broke down in 2018. Hence, in the event of a market crash, portfolios may suffer losses both from the stocks side and the hedge side. Forcing PMs to sell assets, accelerating a crash.”

Bitcoin Wasn’t in an Ideal Position to Recover

After recording a yearly low daily trading volume, Bitcoin struggled to demonstrate a recovery in its momentum and price trend. Other major cryptocurrencies and tokens were affected by the lack of momentum in BTC, unable to initiate a promising price movement.

Featured image from Shutterstock.

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