- Bitcoin has been trading in close tandem with equities throughout the past several days
- Heightened correlation to risk-on assets is a common BTC trait during times of immense global turbulence
- Although this strikes a blow to its safe-haven narrative, the cryptocurrency still has a long way to go before it fully decouples with the traditional markets
- This global economic turbulence that is weighing on Bitcoin may only get worse as the year drags on and as the elections approach
- One economist is observing that Bitcoin’s price may see a prolonged bout of choppy trading, which could ultimately cause it to dive as low as $9,000 before it can stabilize
Bitcoin has been moving in tandem with the stock market. Although this correlation may bode well for BTC during times of upwards expansion amongst equities, recent turbulence has caused investors to flee risk-on assets like the benchmark cryptocurrency.
Throughout the past few days, BTC’s price has plunged from recent highs of $11,200 to lows of $10,400.
It is now caught within a bout of sideways trading as investors closely observe the traditional markets, looking for cues that could offer insight into Bitcoin’s near-term trend.
One crypto-focused economist is now noting that continued uncertainty amongst stocks could cause the crypto to see continued choppy trading that ultimately crushes its uptrend and drives its price towards $9,000.
Bitcoin Stagnates Amidst Stock Market Turbulence
At the time of writing, Bitcoin is trading up marginally at its current price of $10,500. The crypto has been able to stabilize today as the stock market trades relatively flat.
The stock market has been weighing heavy on BTC as of late, with investors growing increasingly concerned about the lack of any progress surrounding a second federal stimulus package.
The pandemic is also showing few signs of nearing an end, which is perpetuating investor’s uncertainty.
How the traditional market trends in the near-term will undoubtedly play a massive role in Bitcoin’s price action.
Economist: Crypto Traders Should Proceed with Caution as Global Uncertainty Mounts
Alex Krüger, a popular crypto-focused economist, explained that Bitcoin could be pushed into the $9,000 region as global economic uncertainty persists. He believes this would cause chaos in the market.
Nevertheless, he does note that he expects DeFi tokens to see some short-term relief, as they have been hit hardest by the recent selloff.
“Crypto traders best be careful with risk, as BTC could be pushed to the $9Ks in this chop (45 days to go) and hell would then break loose. In the immediate term, a further 10% bounce across DeFi makes sense given how it got crushed.”
How equities trend throughout the week ahead should offer crypto investors with guidance as to what to expect for Bitcoin in the mid-term.
Featured image from Unsplash. Pricing data via TradingView.
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