Bitcoin has once again acted as a leading indicator for risk assets, plunging sharply before the ongoing global stock market swoon.
Bitcoin’s price peaked above $126,000 in early October and started falling, eventually hitting lows near $60,000 early last month.
The sell-off featured rapid outflows from U.S.-listed spot ETFs.
Bitcoin’s price structure mirrored major equity benchmarks including the S&P 500, SPDR Financial Select Sector ETF and India’s Nifty index.
This isn’t the first time bitcoin has led price action in traditional risk assets.
Bitcoin either rolled over or failed to make new highs while the S&P 500 pushed ahead.
In each case, the equity rally eventually stalled and reversed,” Stankiewicz said.
Over the years, the cryptocurrency has often foreshadowed equity trends, most clearly in late 2021-2022.
BTC peaked near $60,000 in November 2021 and quickly tanked to under $50,000 in a month.
All things considered, the takeaway is clear: Stock traders should start watching bitcoin trends closely from here.
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