Bitcoin Slides Below $20,000 as S&P 500 Breaks Down

Key Takeaways

Bitcoin surged previous $20,000 immediately, however then erased its positive aspects.
The highest cryptocurrency’s value motion was possible influenced by the S&P 500 breaking its summer season lows.
Bitcoin and different crypto property have traded in shut correlation with shares all through this yr.

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Bitcoin surged by greater than 5% immediately, but it surely’s now buying and selling within the pink. Its value motion is probably going correlated with the S&P500 buying and selling at its lowest stage since November 2020. 

S&P 500 Drags Bitcoin Down

Bitcoin rallied immediately, but it surely erased its positive aspects as shares retraced. 

The highest crypto confirmed indicators of life immediately after breaking previous $20,000, but it surely’s since retraced the totality of its positive aspects. In line with CoinGecko information, Bitcoin is buying and selling at $19,014, down 0.2% immediately. Bitcoin’s preliminary bounce met resistance within the $20,350 space, which has served as an vital stage because it tumbled down from $25,000 in mid-August. 

Bitcoin’s rise and fall can possible be defined by the current selloffs in shares (the crypto market has proven a excessive correlation to conventional markets all through this yr). The S&P 500 hit 3,631 after a 0.71% retrace immediately, its lowest stage since November 2020. The Nasdaq Composite has but to observe go well with, buying and selling about 200 factors above its summer season lows. The Dow Jones, in the meantime, has been making new lows all through this month. 

2022 has been one of many worst years in U.S. inventory market historical past, thanks primarily to the Federal Reserve’s dedication to aggressively elevating rates of interest to curb inflation. The S&P 500 is down 24.3%, the Nasdaq 32.88%, and the Dow Jones 20.79% since hitting all-time highs in January. The U.S. central financial institution introduced a 3rd consecutive 75 foundation level rate of interest hike earlier this month, and Fed Chair Jerome Powell has repeatedly indicated that it plans to carry its hawkish stance till inflation drops to 2%.

The crypto market’s response to Bitcoin’s strikes has been muted thus far. ETH has proven marginal resiliency; it’s at present buying and selling, up 0.2%. Ethereum has lagged behind Bitcoin for the reason that community accomplished “the Merge” to Proof-of-Stake on September 15, a extremely anticipated improve that turned out to be a “promote the information” occasion. Per TradingView information, the ETH/BTC has slid all the way down to 0.069 after hitting a 2022 excessive simply forward of the Merge. ETH/BTC has been buying and selling in a variety from 0.05 and 0.085 since Might 2021.

Disclaimer: On the time of writing, the writer of this piece owned BTC, ETH, and a number of other different cryptocurrencies.

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