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October 31, 2023

Warning: Bitcoin Could Correct by 54% as Stocks Plummet

Ethan Lim
Written byEthan LimWriter
Researched byNikos PapadopoulosResearcher

Introduction

Crypto analyst Justin Bennett is issuing a warning on Bitcoin (BTC) as the flagship crypto asset has been experiencing double-digit gains over the past week.

Warning: Bitcoin Could Correct by 54% as Stocks Plummet

Historical Correlation

Bennett points out that based on the historical correlation between BTC and stocks, Bitcoin could correct by 54% from its current level. He highlights that a steep stock market correction could trigger a Bitcoin collapse, similar to what happened in February and March of 2020 when the S&P 500 stock index plunged by 25%. During that period, Bitcoin fell by around 50%.

Support Level

Bennett foresees the S&P 500 index falling to around 3,255 points, which is a support level that was previously a resistance level in 2020 before converting to a support level in 2021. This level also aligns with the index's long-term ascending trend line, according to Bennett's chart.

Potential Impact on Bitcoin

While it is impossible to know for sure, Bennett suggests that a 23% correction from the S&P 500 could have a similar effect on Bitcoin as the previous 25% correction. He emphasizes that correlations between equities and Bitcoin can change over time.

Conclusion

In conclusion, Bennett warns that if equities experience a significant downturn, it is only a matter of time before crypto follows. Investors should be cautious and consider the potential risks before making any high-risk investments in Bitcoin or other cryptocurrencies.

About the author
Ethan Lim
Ethan Lim
About

Ethan Lim, a native of the Lion City, is Singapore’s rising star in the domain of online casino guide localization. He masterfully blends his intimate knowledge of local culture with international gaming standards to produce content that resonates deeply with Singaporeans.

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