The cryptocurrency sector is still reeling from the shock of FTX, one of the once largest crypto exchanges, filing for bankruptcy and its CEO resigning, but Bitcoin (BTC) has another thing to fear – its correlation with equities.
Observing the activities of the S&P 500 Index and Bitcoin side by side, it becomes evident that the flagship digital asset is following the downward pattern of the stock market, as crypto trader and analyst Josh Rager noted on November 15.
As he explained, “the biggest concern at the moment for BTC is the stock market,” as:
“Equities fall and Bitcoin continues to fall with it.”
According to Rager’s earlier tweet:
“Personally, the most bearish case for BTC is the stock market pulling back. The majority of people/funds overleveraged involving FTX meltdown seemed to be overexposed w/ altcoins. Contagion is very real but will this actually create more sell-off on Bitcoin?… worth asking.”
Trading volume soars despite declining price
Meanwhile, the largest decentralized finance (DeFi) asset’s trading volume has hit an eight-year high representing the highest volume in history, despite the continuous downtrend of Bitcoin’s price.
Indeed, Bitcoin was at press time changing hands at the price of $16,540, down 2.49% on the day and 5.42% across the previous week, adding up to the cumulative monthly decline of 15.46%, as per data retrieved on November 16.
After the asset breached the critical $18,000 support level, fears of further corrections have given bears a firm near-term technical advantage, despite bulls working to stabilize the market.
Meanwhile, a pseudonymous crypto expert known as Moustache has estimated that Bitcoin needed to hold the level at around $15,800; otherwise, it might continue toward $13,000, as Finbold reported earlier.
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Source: https://finbold.com/stock-market-drags-bitcoin-price-further-south-will-the-trend-continue/