Bitcoin continues to trade sideways, but also has been unable to shake an ongoing correlation with the stock market.
If the cryptocurrency doesn’t break out soon and break free from the shackles of the S&P 500, it could drag Bitcoin down at the end of the month.
Is Bitcoin Waiting For The Stock Market To Break Down?
For nearly two months straight now, Bitcoin price has been locked in a tight trading range. Volatility has been declining, and everyone is watching and waiting for what they expect to be a major, explosive move.
But even despite best efforts from both bears and bulls to break the range, things just keep pacing sideways. Concerning data shows that this could remain a lot longer than investors would hope or expect.
The boredom in the otherwise notoriously volatile asset class is essentially the max pain scenario for crypto traders.
RELATED READING | HOW BITCOIN OUTPERFORMED BOTH THE S&P 500 AND NASDAQ IN FIRST HALF 2020
Those accustomed to Bitcoin’s wild price swings are now looking elsewhere, to altcoins like Chainlink, Tezos, or DeFi tokens.
Bitcoin may be waiting for the stock market to break down, and that could be coming towards the end of the month.
BTCUSD SPX Correlation Line Chart | Source: TradingView
Q2 Earnings Reports Coming Late July Could Be Straw That Breaks The Camel’s Back
The first quarter of the year took the S&P 500 to a new all-time high. Meanwhile, Bitcoin price was trading above $10,000. But Black Thursday and the pandemic had other plans and resulted in the stock market closing its worst quarter on record.
Now, the second quarter of the year has come to a close. The major corporations or companies listed on the stock market revealing their earnings could cause markets to collapse again.
The economy is on thin ice. A major stock market crash has been all but erased and kept afloat by stimulus money and Fed money printing. But the fragile market could collapse at any moment.
Come the end of the month, the sell trigger could arrive by way of company second-quarter earnings reports coming to light.
With Q2 now in the history books, businesses across the United States will reveal their revenue and earnings for the first half and the second quarter of the year. Q1 was already a struggle for most companies, which only lost March revenue due to quarantine conditions.
RELATED READING | ECONOMIST WARNS OF 1929-LIKE SECOND LEG DOWN; WILL BITCOIN FOLLOW?
In Q2, however, nearly the entire quarter was spent in lockdown, with things only just now starting to reopen in stages.
Negative performance in Q2 could be the Jenga-piece that sends markets toppling down when pulled later this month, and due to Bitcoin’s ongoing correlation with the S&P 500, it could be disastrous for the cryptocurrency.
Failure to break up through resistance here will have exhausted significant buying at this price level. It would also set a lower high, and if a lower low is set next, the crypto market could be in trouble and any new bull market delayed further.
There seems to be no escaping the potential impact of the pandemic, and even though stocks have sustained, they’re on thin ice and any pressure could cause another Black Thursday style selloff.
Worse yet, cases of the virus are still climbing in the United States, signaling that Q3 and Q4 may not be much better for these battered and beaten businesses, nor will it be for Bitcoin.
Featured image from Shutterstock.
Bitcoin Price Will Skyrocket as Markets Riddled by Election Uncertainty, Analyst Says
Octavio Marenzi, founder and CEO of capital markets consultancy firm Opimas LLC, recently predicted that the current economic situation will shoot Bitcoin’s price “through the roof.”
Simultaneously, he suggested that the traditional financial markets will suffer as the COVID-19 fears grow.
Opimas CEO: Bitcoin Will Shoot Through The Roof
Appearing on RT’s Boom Bust, Marenzi was asked about the current state of the financial world and his prediction by the end of the year. He seemed somewhat cautious in providing precise numbers. Nevertheless, the CEO of Opimas outlined four factors that he believes drive the markets now.
According to Marenzi, those are the growing spread of the coronavirus, the stimulus deal proposed by the US government, the Federal Reserve’s policy, and the 2020 US presidential elections. He emphasized the importance of the upcoming vote as “people are starting to get nervous about that.”
The elections’ unknown developments could lead to a “messy” outcome, resulting in even more concerns among investors. Such circumstances could prompt severe price drops within traditional financial assets. However, Bitcoin might emerge as the winner.
“There’s a substantial chance that it’s going to be a contested election and will be very, very messy indeed. We will see the markets overall trending down, while things like Bitcoin shooting through the roof.”
COVID-19 Second Wave To Damage The Markets?
Once reports started emerging in early 2020 that a new virus coming from China was infecting people, the financial world took a beating. The worst came in mid-March during the so-called liquidity crisis, which saw massive price slumps among all assets.
The markets have mostly recovered since then, but the COVID-19 pandemic hasn’t disappeared. In fact, it seems that the dreaded second wave has just begun to develop. The number of confirmed cases grew above 40 million on Monday.
Several countries, mostly in Western Europe, have brought back some of the strict restrictions. Those include even full lockdowns.
Apart from health concerns, this also raises worries among investors. Bitcoin was not exempt from the first price drops, as it plummeted by over 50% in a day.
However, BTC is among the best-performing assets on a yearly-scale, with its 65% increase. Should Marenzi’s words materialize, the primary cryptocurrency could see even further long-term price appreciation.
Bitcoin Dominance at 2-Month High: Disaster for Altcoins
August was a bullish month for altcoin traders as they ranked in profits, forcing Bitcoin dominance to drop below 60% for the first time since the start of the year. However, the altcoin euphoria was shortlived as September brought along the bears.
The end of Q3 wasn’t great for Bitcoin traders, but that was expected as September is usually not a profitable month for Bitcoin. In fact, data shows that Bitcoin has lost more in September than in any other month.
As expected, the Bitcoin effect was seen across boards in the market. Altcoins suffered the most, shredding almost all of the profits accumulated in the previous month.
Bitcoin Eyes $12K
Bitcoin is pushing hard towards the $12k mark. It traded as high as $11,942 for the first time since mid-August.
Analysts believe the trend is the start of a new bull cycle for the leading cryptocurrency considering the coin shielded itself and recovered quickly from the recent negative news, including BitMEX’s charges and OKEx’s withdrawal saga.
Although October has been impressive for Bitcoin, and the coin has since recovered from the bearish move in September, altcoins continue to live in the terrible nightmare from the past month.
October: Another Nightmare For Altcoins
Bitcoin dominance started rising in mid-September after it went as low as 55%. At the time of writing, the cryptocurrency maintains a 60.3% dominance of the entire crypto market while the altcoins struggle with 39.7%.
Even Ether (ETH), the second-largest cryptocurrency, was not spared. In August, the coin traded near the $500 mark, reaching $485 for the first time in two years. In the last two months, Ether lost over 20% of its value, and market dominance dropped from above 15% to 11%.
Now, ETH is exchanging hands at $369 with a 2% loss on the daily chart. However, speculation in the market is that the upcoming ETH 2.0 Phase 0 could provide the needed boost for Ether bulls.
Looking at the top 100, a handful of altcoins have shredded at least 15% of their value on today’s trading session. Some of the most significant losers include Uniswap (-17%), Crypto.com (-25%), Balancer (-19%). Meanwhile, Flexacoin saw a big boost with over 258.11% gains in the last 24 hours.
Crypto.com Integrates PayID Offering 5M Users an Easy and Unique Way to Send & Receive Crypto
HONG KONG, October 19, 2020 — Crypto.com today announced PayID, a universal payment identity developed by the Open Payments Coalition, is now available on the Crypto.com App.
Crypto.com’s 5M+ users can register for a PayID from the Crypto.com app, consolidating complex wallet addresses and accounts into a simple ID that works across any payment network and currency. Users who register for their unique PayID will get an exclusive Crypto.com-branded, easy-to-read ID — such as “yourname$payid.crypto.com — that enables users to send/receive crypto payments from other compatible wallets with just a single ID, easing their ability to connect to 100M+ crypto users worldwide.
PayID solves a key pain point in the crypto payments world, which consists of many closed and complex networks. Participants must manage multiple long and random wallet addresses, increasing the likelihood of erroneous transactions. PayID creates a free, open and common protocol that allows for interoperability between any payment network or currency.
Starting today, Crypto.com is offering early access for select customers to register their unique Crypto.com PayID. To be eligible:
- Stake 10,000 CRO or more in Crypto.com Exchange; or
- Stake 10,000 CRO or more in Crypto.com App
On 2 November 2020 all Crypto.com App users can register their own Crypto.com PayID within the Crypto.com App.
Once registered, users can send crypto from other compatible wallets to the Crypto.com App with just their PayID, instead of a full-length crypto address. At launch, supported cryptocurrencies include CRO, ETH, BTC, XRP and many more ERC20 tokens. Users can also send crypto to other compatible wallets using PayID hosted by other members in the Open Payments Coalition.
Crypto.com was founded in 2016 on a simple belief: it’s a basic human right for everyone to control their money, data and identity. Crypto.com serves over 5 million customers today, providing them with a powerful alternative to traditional financial services through the Crypto.com App, the Crypto.com Card, the Crypto.com Exchange and Crypto.com DeFi Wallet. Crypto.com is built on a solid foundation of security, privacy and compliance and is the first cryptocurrency company in the world to have ISO/IEC 27701:2019, CCSS Level 3, ISO27001:2013 and PCI:DSS 3.2.1, Level 1 compliance. Crypto.com is headquartered in Hong Kong with a 600+ strong team. Find out more by visiting https://crypto.com
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