Both Crypto and stocks show no sign of a relief bounce, and they continue to drop amidst a tight correlation between each other.
The current dip in the financial market seems unrelenting as both stocks and crypto further decline. Investors, hoping the worse was over, have been dealt a lousy hand again as the S&P 500 slumped 3%. Moving in tandem with it, Bitcoin also saw its price retrace to $29,000, indicating a continued correlation with the stock market.
Santiment’s data shows that BTC and the S&P 500 had a price drop, which cancelled the minimal gains made last week. However, Gold continues to see increases in its price, climbing by about 1.5% this week. Its strong performance has come as the US dollar index, and treasury yield fell by more than 1% in its previous trading session.
Source: Bloomberg
According to Bloomberg, the S&P 500 dip represents the seventh straight week of losses for the index, its worse run since 2001. In 2001, the losing streak got to eight weeks. Since then, the index has had several six weeks of losing streaks until now. Of more concern to investors was the brief slump of the index into the bear market territory before significant buying caused a relief.
Source: Trading View
Similarly, Bitcoin has also seen seven consecutive weeks of losses, the first time it has done so in its history. It is also on track to make the streak eight successive weeks. The poor performance of the digital asset and equities is exacerbated by the rising global inflation and the growing hawkishness of the Federal Reserve.
Consequently, with more interest rate hikes still to come, a reversal of the bearish trend may still be a way off. Several analysts opine that a trend reversal may not happen until Bitcoin approaches the highs of 2018 at $19,600. This view is despite several on-chain metrics indicating that the crypto market capitulation may be over.
Overall, the entire financial market is tethering on the edge of further downtown amidst global macro headwinds. However, it may take a black swan event to change the overall market trend. Therefore, investors would need to take extra caution not to be caught unaware by further slumps in BTC and equities.
Do you think further slumps would occur in the Bitcoin and Equities market? Let us know your thoughts in the comments below.
Chris is a crypto enthusiast and a firm believer in the blockchain’s ability to create a new financial paradigm. Through writing, Chris hopes to expose the intricacies of this disruptive technology and how it is beneficial to Africans and developing countries. He aims to give readers a rational and unbiased outlook of the industry by equipping them with the necessary information to make enlightened investment decisions.
