Bitcoin remains at the risk of losing a part of its yearly gains on a negative stock market sentiment, according to Kevin Svenson.
The chart analyst highlighted the S&P 500’s three-day rout this week, adding that if it becomes a “confirmed reversal,” then it would take Bitcoin–and the rest of the cryptocurrency market–lower in tandem. He reasoned his bearish analogy with a so-called correlation between Bitcoin and the S&P 500.
The benchmark cryptocurrency and US index traded almost synchronously after crashing lower during the March 2020 rout. The Federal Reserve’s infinite bond-buying package, coupled with near-zero interest rates and government spending, reduced the appeal of cash and US Treasuries that were then returning zero-to-little yields.
As a result, bids for riskier assets like stocks and Bitcoin surged.
BTC/USD, at one point, surged by almost 235 percent from its mid-March nadir of $3,858 (data from Coinbase). The S&P 500, at the same time, climbed by as much as 63 percent.
Last week, the S&P 500 experienced a blowoff at its YTD top, a sell-off triggered by overvalued tech stocks. While there was a small rebound this Wednesday, the index gave up the intraday gains a day later after disappointing news from US Congress and the labor market.
The Democrats voted to block the second COVID-19 relief stimulus proposal put forth by Senate Republicans on Thursday. They argued that the aid was too small, especially for the hardest-hit American households. Economists and analysts argued that any further hints of another package now stands exhausted.
Meanwhile, a recent decline in new US unemployment claims stalled last week, giving away signals that an upside rebound in the jobs market was not straightforward.
The S&P 500 plunged 59.77 points, or 1.8 percent, to 3333.19 at the Thursday close. BTC/USD lagged the US index, falling a day later by $127, or 1.24 percent, to $10,214, as shown in the chart below.
That served as one of the main reasons behind Mr. Svenson’s bearish outlook of the Bitcoin market.
Bitcoin Technical Setup
Konstantin Anissimov, Executive Director at CEX.IO, meanwhile noted that Bitcoin’s ability to resist the latest declines above a technical support level of $10,000.
The analyst added that the cryptocurrency might fluctuate inside its $10,000-10,400 range. Unlike Mr. Svenson, Mr. Anissimov expected a bearish reversal in the Bitcoin market.
Other analysts also said the same about the S&P 500, with Karen Firestone, chief executive of Boston-based Aureus Asset Management, calling the index’s correction a minor one.
BTC/USD was trading 1.04 lower at $10,235 at the time of this writing.
Originally from Bitcoinist.com https://ift.tt/2Rc6ddk
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