Bitcoin tests critical price barriers as US stock indices crash, raising questions about crypto-equity correlation.
Bitcoin (BTC) price entered into crucial resistance zone as the U.S. stock market is witnessing one of its worst trading days in history.
The NASDAQ 100 index dropped 1003 points, setting a record for moderately points [no 1000 point drops, etc.] and at one point, it was within 1.5% of circuit breaker. Meanwhile, the S&P 500 has declined approximately 17.5% from its peak, approaching the official bear market threshold of 20%.
Market analysts note that despite traditional markets tumbling, Bitcoin has established a trading range between support at $81,500-$82,000 and resistance at $84,500.
“Despite the stock market’s historic drop, crypto has held up surprisingly well in the short term,” one analyst commented. “Some are calling this a decoupling, but based on years of observation, the correlation will likely reassert itself.”
Hedge funds are reportedly selling stocks at the fastest pace since the 2010 global financial crisis, while retail investors appear to be taking the opposite approach by buying the dip. This divergence in market behavior has some experts concerned that further downside may be ahead.
While the bear market of 2022 was driven by inflation and Federal Reserve rate hikes, the current downturn has been blamed on U.S. tariffs and trade war concerns, factors that analysts say could potentially unwind more quickly in the case of policy shifts.
For those with a short-term view of Bitcoin, there are further nested supports at $80,000 and $78,500, while a breakout above the $86,000-$88,000 resistance area could pave the way up toward $91,000-$92,000.
Bitcoin is trading at $83,200 at the time of this writing, a 1.2% drop over the last day.
