Bitcoin And The Stock Market Have Officially Coupled (Or Have At Least Become Close Friends)

I went to bed last night as bitcoin was heading up to $9,700. This is it I thought to myself, we are finally going back above 10k. Then I woke up to see another drop of 3% as we hover in the mid 9k zone for another week. This has been going on for a month now. Thinking something might have gone wrong or we might be entering a bear phase I was disappointed. That was until I saw the market had dropped 3% in around the same time. And this isn't the first time this has happened. There have been other days bitcoin has taken a big drop when the stock market did the same thing.

So what does it mean?

The Current Situation

The situation the world is in has effected us all and that includes bitcoin. Bitcoin is great for hyper-inflation and most global events but this is one that no market can escape. Everyone is scared and that means people are not thinking about new investments at this time. Bitcoin is close to gold in many ways but it is still a risky asset. It is not the time to invest in anything risky as life itself is risky enough at the moment. People are not looking to get into anything new and a lot of people are looking to make it through this not figure out where to put their money. Sure people being stuck at home could use dapps if they were more popular but we haven't gotten to that place yet in the dapp space. So that means it is only the ones in crypto who have too much time to spend on their computer who are the ones watching the numbers. This will change but it might take some time.

Institutions Really Did Buy Bitcoin

There was lots of talk that traditional investors were buying bitcoin left and right a few months ago. The price did have a run from 3k to 9k but since then it went quiet. Was this run due to banks and investing firms buying bitcoin or just the same people buying crypto. It is impossible to tell, but watching the stock market and bitcoin move in tangent does suggest that a lot of firms do have a good position in bitcoin. The fact that they are moving together could be because big players are positioned in both.

This is a good thing for long term as it means that more parties and exposed to Bitcoin and when the markets turns you will see a lot more action in the mainstream. It may be frustrating now as you see both the markets tank at the same time but I do think this is temporary. Give it a few months and when things start to return we can see crazy action when money starts to go back into the market.

A Bullrun Might Be Pushed Back

A lot of the charts show a bullrun is soon to start. This can still happen but it is possible that the bullrun gets pushed back months until the world gets back on its feet. No one planned for this and it is a event that is impossible to avoid. I do think things will rebound safely when the most important aspect of people's health is dealt with and we could then see if bitcoin and crypto can make that new ATH run that the charts suggest.

Bitcoin Is Still Holding

The good news is Bitcoin isn't tanking that much on these days. The stock market is actually dropping at the same rate which is pretty crazy considering how volatile bitcoin can be. And not only is bitcoin holding well during these days it tends to rebound fairly quickly. We haven't seen 9k in some time and this a good sign that bitcoin can take these hits and keep a solid ground.

It is interesting to see but I think there are a lot more people watching this time around in the crypto space. We will have to watch both markets and then know when things start to change.

Posted Using LeoFinance