US Stock Indices Dow Jones, SPX Tank, Taking Down Bitcoin In Tandem

Tony "The Bull" Severino

Last Updated: June 11, 2024 2:16 pm

3 mins read

bitcoin stock market tank Dow Jones spx sp500

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Bitcoin has been collapsing after failing to hold $11,000, and it could be thanks to negative sentiment surrounding a tanking stock market that’s taking the crypto market down in tandem.

Here’s why things could get really bad for Bitcoin and the rest of the crypto space if major US stock indices continue to plunge.

Major US Stock Indices S&P 500, Dow Jones, Drop On Today’s Quadruple Witching

The S&P 500 is down more than 7% from local highs. The Dow Jones Industrial Average, has also lost 5% from its recent local peak high, faring slightly better than the index from Standard and Poor’s.

The stock market is dropping and dropping hard after several major stock indices set new all-time highs last month.

As soon as the month turned, however, stocks turned downward, and so did Bitcoin.

The top crypto asset by market cap actually led the market wide dump by almost 24 hours, but the stock market followed closely behind, and now has since taken over as the primary drive behind the downside momentum.

Making matters worse for Bitcoin and the rest of crypto, is the fact that the ongoing correlation between the disruptive asset class and traditional equites has yet to be shaken off.

The correlation – if stocks see another Black Thursday style fall – could drag Bitcoin down further in tandem.

BTCUSD Versus SPX Versus DJI Correlation Chart Comparison | Source: TradingView

Bitcoin Could Get Dragged Back Down To Black Thursday Lows If Stocks Tumble Again

The leading cryptocurrency by market cap set a local high at $12,400 but since came crashing down. After a valiant defense by bulls at to hold strong at support below $10,000. the cryptocurrency quickly found itself trading back at $11,000.

The recent rally, however, may have been a bearish retest of support turned resistance, just in time for the stock market to take the crypto market down further.

The reason for the sudden rise in turbulence across the stock market, could be due to a spooky-sounding event called the quadruple witching.

This quarterly stock options and futures expiry can cause an explosion in volatility across stocks, and that could be what is prompting stocks to suddenly move lower.

If the drop gets severe in stocks, Bitcoin is at risk of another Black Thursday type drop to new lows. The added risk of the coming election, profit-taking, portfolio rebalancing, and panic from another round of the pandemic could also be to blame.

Whatever the case may be for the bearish turn, stocks could end up taking Bitcoin down with them once again.

Featured image from Deposit Photos, Chart from TradingView

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.

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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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