Although BTC has been closely correlated to the traditional markets over the past few days, it is important to keep in mind that this correlation appears to have broken today, as the major US stock market indices have bounced today while Bitcoin remains stuck below $9,000.
The benchmark cryptocurrency’s recent price action has led one Gold bug and outspoken crypto critic to note that BTC is especially bearish due to its inability to pump with yesterday’s emergency 50 basis point rate cut from the Federal Reserve.
Bitcoin Stagnates as US Stock Market Recoups Yesterday’s Losses
It has been a rollercoaster of a week for the US stock market, with the benchmark indices incurring incredibly volatile price action.
The week kicked off with an intense rally that led the Dow Jones to surge over 5%, with the S&P 500 and Nasdaq both climbing over 4%. This movement came on the heels of one of the worst weeks the market has seen since the 2008 financial crisis.
Yesterday, however, the majority of these gains were lost due to yet another sharp selloff, with the latest drop coming about in the hours following an emergency 50bps rate cut from the Fed.
Today the markets have once again climbed higher, with the Dow Jones climbing 2% while the S&P 500 has climbed 1.6%.
Bitcoin has not been able to match the stock market’s momentum, as the cryptocurrency is currently trading down just under 1% at its current price of $8,750.
Gold Bug: BTC Highly Bearish Following Recent Reaction to Rate Cut
Peter Schiff, a prominent Gold bug, once again bashed Bitcoin in a recent tweet, explaining that its inability to rally in spite of the recent 50bps rate cut and volatility within the traditional markets calls into question what circumstances will cause it to rally.
“If Bitcoin can’t rally with an emergency 50 basis point rate cut, plus all of the recent stock, bond, currency and gold market volatility, under what circumstances will it rally? If Bitcoin won’t go up, why own it? The answer to that question is ‘sell.’ Look out below!”
If @Bitcoin can’t rally with an emergency 50 basis point rate cut, plus all of the recent stock, bond, currency and gold market volatility, under what circumstances will it rally? If Bitcoin won’t go up, why own it? The answer to that question is “sell.” Look out below!
— Peter Schiff (@PeterSchiff) March 3, 2020
Interestingly, Bitcoin did rally on the heels of yesterday’s rate cut, although all its momentum was lost when the cryptocurrency faced a swift rejection at $8,900.
It still remains unclear as to whether or not the stock market’s rally today will help pull Bitcoin up as well, or if the resistance it faces around its current price levels will be insurmountable.
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