Cryptocurrency market update: Bitcoin defends support in tandem with global stock indices recovery


  • Thursday 11 was not the first time that the stock market corrected alongside the crypto market.
  • “Non-correlation is not the same as inverse correlation so there’s no guarantee that when the market goes down crypto will go up," Matt Hougan.
  • Bitcoin is currently stuck in range below $6,250.

Bitcoin led the global cryptocurrency market in a nerve wrecking rollercoaster ride yesterday. Digital assets, and especially the major assets fell head first into muddy waters. Moreover, the continued to sink below lifeline support areas. Interesting, the global stock market was experiencing a similar trend.

Read more on that story here.

Before the waterfall plunge on Thursday, October 11, Bitcoin was in consolidation along with the other coins and altcoins. Several experts and analyst head predicted a bullish breakout following the impressive consolidation. However, the market disapproved all the predictions leading to a $16 billion loss in the entire cryptocurrency market. Bitcoin, for example tanked 5% while the rest of the top ten cryptos corrected lower by over 10%.

Nevertheless, the slide interestingly occurred amid a global stock indices drop. From time to time experts and analysts have reminded as that cryptocurrencies are not correlated with the stock market. However, the price correction yesterday proved a fact that non-correlation does not entirely mean inversely related.

On Wednesday, October 10, the global stock market embarked on a downward trend where Dow Jones, Nasdaq and even S&P 500 suffered heavily at the hands of the bears sending jitters in the entire global market. Nasdaq, for instance, declined 4% while Dow Jones Index plummet by at least 832 points on the day. The drop was not only recorded by the above stocks but other companies including but not limited to Nike, Visa, Apple, Boeing, Amazon, Netflix and Adobe suffered too.

Significantly, this was not the first time that the stock market corrected alongside the crypto market. Earlier in the year, February to be specific saw the two market correct simultaneously.

Furthermore, the recent drop was so sudden and utterly surprising to many investors and experts because, just like week a report surfaced that showed that institutional funds were already trickling into the crypto market. This was definitely a brew for a surge because investors believed that the impending bullish breakout in the market would lead to a fall in the stock market.

To put this into the right perspective, Bloomberg interviewed matt Hougan, who is the VP of Bitwise Asset Management. Hougan said that the drivers of traditional markets differ greatly with the stock market. Moreover, lack of correlation with the digital assets should not be interpreted as inverse correlation. Hougan said:

“Non-correlation is not the same as inverse correlation so there’s no guarantee that when the market goes down crypto will go up. Over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the low correlation to persist.”

Bitcoin is currently stuck in range below $6,250. At the same time, the crypto is supported strongly at $6,100. BTC/USD is trading at $6,208 while using the moving average support slightly below $6,200.

Read more on the latest Bitcoin price analysis here.

BTC/USD 15-minutes chart


Get 24/7 Crypto updates in our social media channels: Give us a follow at @FXSCrypto and our FXStreet Crypto Trading Telegram channel


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

ALT, WLD, ENA, ID set for $200 million token unlocks next week

ALT, WLD, ENA, ID set for $200 million token unlocks next week

The circulating supply of ALT, WLD and ID will see a hike next week, with over $200 million unlocks in sight. All tokens involved in upcoming unlocks are up in the past 24 hours. ALT will see the highest unlock share, with $115 million worth of new tokens entering circulation.

More Cryptocurrencies News

Why these altcoins may not rise despite Ethereum ETF impact

Why these altcoins may not rise despite Ethereum ETF impact

Altcoins market cap against Ethereum has been on a multi-year decline. Ethereum has outperformed several altcoins despite wider market assumptions that they provide leveraged exposure to its price. 2x long ETH could yield better results than purchasing altcoins ahead of the Ethereum ETF launch, said analyst.

More Cryptocurrencies News

Institutions anticipate potential Tuesday Ethereum ETF launch after making strategic moves

Institutions anticipate potential Tuesday Ethereum ETF launch after making strategic moves

Grayscale lowered its Ethereum Mini Trust fees to 0.15% in a bid to reduce potential outflows from ETHE when ETH ETFs go live. Galaxy Digital increased its staked Ethereum assets to $3.3 billion after acquiring CryptoManufaktur, reveals CoinDesk. 

More Ethereum News

Binance to begin investing customer fiat funds in US Treasuries

Binance to begin investing customer fiat funds in US Treasuries

Binance received court approval on Friday, allowing it to invest certain customers' fiat funds in US Treasury bills. Following the announcement, the BNB token saw a 5% rise as crypto community members debated the potential impact of this approval on Ethena's USDe token.

More Binance News

Bitcoin: Will BTC continue its bullish momentum?

Bitcoin: Will BTC continue its bullish momentum?

Bitcoin (BTC) price increased by 5.5% this week until Friday after breaking above a descending trendline. Currently, it is trading slightly higher by 0.23% at $64,166.

Read full analysis

BTC

ETH

XRP