Bitcoin’s Most Bearish Close is a Signal for Bears to Come Out Again: Analyst


Just before the weekend, we fell below the $7,000 level and dropped around $6,750. Although we made our way back above $7,200 on Sunday, we only extended the losses as today we went just under $6,550.

With this drop, Bitcoin has made the “most bearish close we've had in this entire rally,” points out analyst DonAlt.

“If there was ever a signal for bears to come out again, this is as good as it gets, so it would make sense for things to calm down and pull back from here.”

Source: CryptoDonAlt

Down 5.61% in the past week, we still jumped over 15% in the past month after a massive sell-off last month.

March was the 8th worst month for bitcoin since 2013 which closed 24.8% down following the stock market. The worst month was November 2018, with -36.3% returns.

Since the COVID-19 sell-off the world’s leading cryptocurrency correlation with the S&P 500 has been rising.

While economist and trader Alex Kruger says, “Charts for S&P 500 futures, crude oil front month and bitcoin. Honey badger still cares,” others are not of the same opinion.

“I have been short the stock market and long bitcoin multiple times in the past 5 weeks and have had an epic trading run,” said trader Scott Melker. “They’re not correlated for me.”

Foresee turbulence in near future

Last week was the best week for the stock market in over four decades while it was also the worst week with 6.6 million more people filing for unemployment for the first time, bringing the total tally to over 16 million and the jobless rate up to 10%. Chris Low, chief economist for FHN Financial after the jobless claims data last week wrote,

“Stocks are up because the damage to the economy — evident in claims — is beyond comprehension, while the response of the Fed is easier to understand.”

Now, according to Goldman Sachs Group, US stocks are unlikely to make new lows all because of policymakers’ “do whatever it takes” approach.

A combination of a flattening coronavirus curve and unprecedented policy support has “dramatically” cut risks. And if the US doesn't have a surge in infections after the economy reopens, equity markets are unlikely to make fresh lows.

“The Fed and Congress have precluded the prospect of a complete economic collapse. These policy actions mean our previous near-term downside of 2,000 is no longer likely” for the S&P 500 Index.

On March 23, the US benchmark hit a three-year low at 2,237 but climbed to 2,812 on Thursday and is currently at 2,750.

Now, the strategists are expecting investors to look through first-quarter results from the upcoming earning season and focus on 2021 outlook.

“Despite the likely steady stream of weak earnings reports, 1Q earnings season will not represent a major negative catalyst for equity market performance,” the strategists wrote. “Our year-end S&P 500 target remains 3,000.”

The earnings report, however, could mean some hurdles for both crypto and the stock market.

“As earnings reports are released the market should be tested once again. The recent rally hasn't been truly reflective of the harsh economic reality the world is experiencing,” said crypto investor and trader Josh Rager. “Stock & crypto markets could continue to rally in the short term. But foresee turbulence in near future.”

Bitcoin (BTC) Live Price

1 BTC/USD =$41,500.5652 change ~ -7.82%

Coin Market Cap

$776.61 Billion

24 Hour Volume

$27.45 Billion

24 Hour VWAP

$44.18 K

24 Hour Change

$-3,243.65

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