The US Stock Market at Its Lowest: Will Bitcoin Hold Up?

The contagion effect between US stocks and Bitcoin (BTC) may continue to make waves. The performance of the S&P 500, which has recently fallen below its 50-day moving average, is already causing increasing nervousness among investors, which could spill over into the crypto market. How will this development affect Bitcoin?

The movements of the S&P 500 and their impact on Bitcoin

The S&P 500 has recently closed below its 50-day moving average, an event not seen for five months. Meanwhile, US stock indices are delivering mixed performances. A situation that is generally seen as a warning for the cryptocurrency market, particularly for Bitcoin.

Indeed, when major stock indices fall, investors become cautious with their assets. The sense of uncertainty in the financial markets reflects on other digital assets, including Bitcoin. Referring to movements of the S&P 500, Bitcoin holders may anticipate a period of increased volatility. The contagion effect can lead some investors to sell their digital assets to reduce their exposure to risk.

JUST IN:

*THE S&P 500 CLOSES BELOW ITS 50-DAY MOVING AVERAGE FOR THE FIRST TIME IN FIVE MONTHS#techfx pic.twitter.com/UgB0lHEpyh

— Tech-FX (@Techfx_en) April 16, 2024

What should Bitcoiners expect?

Bitcoin is in a critical zone. The leading cryptocurrency is currently priced at $61,950 with a 3.78% decrease over the past 24 hours. This negative performance mirrors that of the last seven days, a period during which the queen of cryptos has lost 10.20% of her value.

If Bitcoin manages to hold above $60,000, the next important threshold would be around $67,000. Historically, this level has posed challenges for the leading crypto. Surpassing this threshold could signify a resurgence of confidence and a possible bullish trend for Bitcoin.

In case of a fall below $60,000, the next support for the queen of cryptos is around $50,000. Bitcoin’s value could thus rapidly tumble in this scenario.

In conclusion, if the S&P 500 continues to fall, Bitcoin could face additional pressure and see its price drop. Conversely, a recovery in stock markets could help the leading crypto recover and potentially exceed its previous highs.