Is The Greater Global Stock Market Once Again Dragging Down Crypto?

Tony "The Bull" Severino

Last Updated: July 16, 2020 9:00 pm

2 mins read

crypto stock market stocks bitcoin index

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Bitcoin has been consolidating below resistance for months now, waiting for a spark to ignite an explosion in either direction. Due to the ongoing correlation between BTC and stocks, a crashing global stock market could drag down crypto with it once again.

Continued Correlation Between BTC and S&P500 Has Kept Crypto Down

Since the start of 2020, Bitcoin and the stock market have had an uncanny and unusual correlation. This initially crushed crypto when the stock market collapsed in a panic-induced selloff in mid-March.

That day is now referred to Black Thursday due to just how chaotic and devastating it was. Bitcoin price plummeted over 50% in 48 hours from above $8,000 to under $4,000.

The stock market that previously set all-time highs just days prior, fell so low it set the worst quarterly close on record at the end of the carnage-filled month.

The pandemic proved to be too much for markets to withstand. But after the sharp selloff, the same markets have since made a V-shaped recovery that has yet to complete.

Before Bitcoin and the S&P 500 reclaim highs set in early 2020, another drop could happen as cases of the virus once again spiral out of control.

Between the pandemic round two incoming, and the continued strain on the economy, global stock indices have finally started to fall again.

Starting today, so did Bitcoin – is the greater global stock market dragging down the crypto market once again?

Bitcoin BTCUSD Correlation With S&P 500 Stock Index | Source: TradingView

Bitcoin Begins Fall To Retest Lows, Due To Global Stock Indices Floundering

An early July pump out of the Independence Day holiday, stemming from bullish Chinese stock advances and a soaring yuan, also pushed BTCUSD and the rest of crypto higher.

The return to risk appetite caused altcoins to begin popping off left and right, as Bitcoin traded mostly sideways, despite a meager advance.

Major stock indices spiked globally, and due to the correlation between the crypto asset and the S&P 500, BTC was expected to follow.

But even with positive news that a vaccine is potentially near, the global stock market is finally feeling the crunch of cases resurging.

The Dow Jones Industrial Average, S&P 500, the Shanghai SE Composite Index, and the Hang Seng stock indices all plummeted over the last 24 hours.

At the same time, a Twitter scam involving Bitcoin has also prompted the crypto asset to start falling from its consolidation range.

Combined with the bearish sell pressure from stocks, it could take the crypto market back down to retest former lows, or perhaps set a new lower low.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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