It’s not looking great for Bitcoin’s price, and the U.S. stock market isn’t faring much better. Market uncertainty fueled by Trump’s policies, combined with weaker economic data, has sent shockwaves through Wall Street. As of now, only 48.11% of companies in the S&P 500 are trading above their 200-day moving average, a clear sign that market sentiment is under pressure.
What Does This Mean for the Market?
This relatively low percentage indicates that a significant portion of S&P 500 companies are struggling. Fewer stocks are holding up, and even fewer are maintaining their position above the 200-day moving average.
However, it’s important to note that an even weaker market in November 2023 eventually hit rock bottom before rebounding.
Predicting market bottoms is risky, but historical patterns suggest that such downturns often signal an approaching stabilization phase. Of course, no one can pinpoint the exact bottom, as this depends on unpredictable factors such as Trump’s trade policies and the overall U.S. economic trajectory.
Another sign of panic in the market comes from retail investors, who are pulling massive amounts of capital from stocks. Bloomberg’s latest data reveals that retail investors withdrew a staggering $1.2 billion from the market in the first hour of trading alone yesterday.
What Does This Mean for Bitcoin?
Bitcoin typically correlates strongly with the U.S. stock market. While the two asset classes couldn’t be more different fundamentally, many investors still treat Bitcoin as a high-risk tech stock.
This is why tracking the S&P 500’s performance is crucial for Bitcoin holders. If the U.S. stock market finds a bottom and stabilizes, there’s a strong chance Bitcoin could enter a recovery phase as well.
For now, however, there are no clear signs of a rebound, meaning we remain in a period of uncertainty. Stay tuned, because when the markets finally turn around, Bitcoin could be in for a wild ride.
