Most major stock indices have collapsed under the pressure of the struggling economy. Whether it is due to the continued correlation between Bitcoin and stocks, or just general market sentiment turning bearish, the leading cryptocurrency by market cap has also started to decline.
With the rest of the market in a sea of red, and Bitcoin’s uptrend just coming to an end, how far could the cryptocurrency fall before a rebound gives the asset enough momentum for another shot at breaking $10,000?Financial Markets a Sea of Red Following FOMC Meeting
All across the world of finance, there’s a sea of red. After most assets saw steady recoveries since the , the rug may have just been pulled out from bullish investors hoping for the fabled V-shaped recovery.Signs were pointing to a full recovery. The Nasdaq composite index set a new all-time high, and both the S&P 500 and the Dow reclaimed highs from February 2020. Even Bitcoin found itself retesting $10,000 yet another time.
Related Reading | Bitcoin Abruptly Surges to $10,000: But Here’s Why a Brutal Rejection Awaits
But following yesterday’s FOMC meeting that forecasted a GDP decline of 6.5% next year, then 5% and 3.5% further declines in the years after, combined with no interest rate increases until 2022, markets began to tumble. Even gold, which saw an initial pump at the news is down intraday. Meanwhile, the Dow dropped over 2000 points since the meeting. Other major stock indices globally saw a dramatic collapse, along with individual stock share prices.
Bitcoin Dragged Down Once Again By The Dow, S&P 500, More
Although markets are resuming the turbulence from March 2020, Bitcoin, an asset known for its extreme volatility has remained relatively stable. BTCUSD has fallen just 5% intraday, which is nothing compared to the asset’s over 20-40% intraday moves.Bitcoin price has been rejected yet again by resistance at $10,000, further prolonging any breakout into a new bull market.
BTCUSD has been steadily rising all throughout April and May, but investors may have benefitted had they followed the sell in May and go away strategy many cylical traders swear by.Related Reading | Bitcoin Daily Close Shows Bulls Are Losing Control: Long-Legged Doji Explained
Today’s drop has turned the June 2020 monthly candle red, after two months of positive price growth. The asset’s block-reward halving came and went, without any meaningful impulse to the up or downside. Instead, Bitcoin price has been trading sideways as many analysts had expected. The brutal selloff that’s hit traditional markets has dragged Bitcoin down once again. The last time around, the Black Thursday collapse took the price per BTC back to under $4,000. Now that a lower high was set, a lower low cannot be ruled out. However, if Bitcoin can find support before a new low is set, it could find the strength needed to finally break and hold above $10,000.