United States Stock Indices Dow Jones, SPX Tank, Removing Bitcoin In Tandem – Daily Research Correspondent

Bitcoin has actually been collapsing after stopping working to hold $11,000, and it might be thanks to unfavorable belief surrounding a tanking stock exchange that’s taking the crypto market down in tandem.

Here’s why things might get actually bad for Bitcoin and the rest of the crypto area if significant United States stock indices continue to plunge.

Major US Stock Indices S&P 500, Dow Jones, Drop On Today’s Quadruple Witching

The S&P 500 is down more than 7% from local highs. The Dow Jones Industrial Average, has also lost 5% from its recent local peak high, faring slightly better than the index from Standard and Poor’s.

The stock market is dropping and dropping hard after several significant stock indices set new all-time highs last month.

As soon as the month turned, however, stocks turned downward, and so did Bitcoin.

Related Reading | Bitcoin Collapse Retests Key Weekly Level Never Lost During Last Bull Run

The top crypto asset by market cap actually led the market wide dump by almost 24 hours, but the stock market followed closely behind, and now has since taken over as the primary drive behind the downside momentum.

Making matters worse for Bitcoin and the rest of crypto, is the fact that the ongoing correlation between the disruptive asset class and traditional equites has yet to be shaken off.

The correlation – if stocks see another Black Thursday style fall – might drag Bitcoin down further in tandem.

BTCUSD Versus SPX Versus DJI Correlation Chart Comparison | Source: TradingView

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Bitcoin Could Get Dragged Back Down To Black Thursday Lows If Stocks Tumble Again

The leading cryptocurrency by market cap set a regional high at $12,400 but since came crashing down. After a valiant defense by bulls at to hold strong at support below $10,000. the cryptocurrency quickly found itself trading back at $11,000.

The recent rally, however, may have been a bearish retest of support turned resistance, just in time for the stock market to take the crypto market down further.

The reason for the sudden rise in turbulence across the stock market, could be due to a spooky-sounding event called the quadruple witching.

Related Reading | Bitcoin, Metals, And Equities “Will Fly” If Dollar Downtend Deepens

This quarterly stock options and futures expiry can cause an explosion in volatility across stocks, and that could be what is prompting stocks to suddenly move lower.

If the drop gets severe in stocks, Bitcoin is at risk of another Black Thursday type drop to new lows. The added risk of the coming election, profit-taking, portfolio rebalancing, and panic from another round of the pandemic could likewise be to blame.

Whatever the case may be for the bearish turn, stocks might wind up taking Bitcoin down with them when again.

Included image from Deposit Photos, Chart from TradingView



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