Justin Bennett, who posted double-digit gains last week Bitcoin An important warning for found.
Justin BennettBased on the historical correlation between BTC and stocks, he thinks Bitcoin could correct 54% from the current level.
A steep stock market correction risks triggering a Bitcoin crash similar to what happened in February and March 2020, when the S&P 500 stock index fell 25%, according to a leading crypto trader. During that period, BTC dropped by an average of 50% from $ 10,500 to $ 3,782.
For the record, I think BTC is still sweeping the lows at $25,000 and possibly $15,000. It’s hard to believe until you look at stocks, namely the S&P 500 index and its 3,255 area.
NEWS CONTINUES BELOWHow would a 23% correction in the S&P affect Bitcoin? It’s impossible to know for sure, but we do know what happened during the last 25% correction.
We’ll wait and see.
NEWS CONTINUES BELOW
Bennett predicts the S&P 500 index will fall to around 3,255 points, a resistance level in 2020, before turning into a support level in 2021. According to Bennett’s chart, the 3.255 level is also in line with the index’s long-term rising trend line.
While Bitcoin was trading at $34,050 at the time of writing, the S&P 500 index was at approximately 4,170 points.
The crypto trader also thinks that although Bitcoin has shown “extraordinary strength against stocks” this month, the divergence is not permanent as “correlations are up and down, just like markets.”