Bitcoin is Going Below $20,000

Here’s why I think Bitcoin could go below $20,000. Before I get into these reasons, I think it’s important to say that I am bullish on Bitcoin in the long term. But despite this, I have never been oblivious to the bearish side of Bitcoin. A lot of people are so emotionally attached to Bitcoin and when you make a negative prediction about Bitcoin people get mad. And I guarantee those types of people will be the ones who lose with crypto. So try to stay open-minded when reading this.

Bitcoin follows the stock market

Bitcoin these past couple of months has been following the stock market really closely. And as the stock market has dipped Bitcoin has also dipped however Bitcoin drops more in terms of percent. During times of fear, money moves from more risky stocks to safer ones. So away from tech and toward stocks like Coca-Cola. Bitcoin falls into the risky category which is why it’s been dipping.

S&P 500 in a bear market

The S&P 500 briefly entered a bear market. A bear market is considered -20% from highs. On average, during bear markets, the S&P 500 drops 33%. This means that the market could drop another 13% or more.

What happens if the S&P 500 drops more?

If the S&P 500 drops more then Bitcoin will also drop a lot more. Resistance points on Bitcoin’s chart won’t hold if the stock market is dipping. They are correlated so if you’re not looking at SPY or ES while trading Bitcoin you’re trading blindly.

I do think based on everything that’s going on right now that the stock market could dip further. I mainly trade crypto futures. What I plan to do is if I long a crypto I’ll make sure it’s a quick long. And if short something it’ll be a longer trade. The market is still in an overall down market so it doesn’t make sense to fight the trend.

Originally published @ https://medium.com/coinmonks/bitcoin-could-go-below-20-000-13125ab52c1