While Bitcoin seemingly remains in a bear trend, sentiment has spread over the past few days that the cryptocurrency market has bottomed; analysts cite the fact that BitMEX funding rates are decisively negative, suggesting an extreme bottom, along with other technical analysis-based evidence to back their lofty opinion.
But according to a top analyst, there is no way Bitcoin has bottomed yet. Here’s why.
Why Bitcoin Might Not Have Bottomed Yet
Over the past week, Bitcoin has shown a remarkable correlation with traditional markets; when traditional markets crashed on Monday, so did BTC, and when they saw record losses on Thursday, so did our favorite orange coin.
According to prominent cryptocurrency trader Cantering Clark, this correlation is a clear sign that the cryptocurrency market has not yet put in a bottom.
In a five-part Twitter thread published Saturday, he explained his thought process further:
“We essentially just went from Bull market to Bear market in under 20 days. The true extent of the knock on effects & damage has yet to even be revealed. We are seeing a fraction of what the reality is.”
Bitcoin has not bottomed because equities have not bottomed.
Go ahead and save this tweet.$BTC $SPX $ES
— Cantering Clark (@CanteringClark) March 14, 2020
He explained further that as it stands, some of the world’s “largest and most fundamentally important industries” are being infected, meaning that the stock market and financial system could continue to see continued pressure as time elapses. This, Cantering Clark wrote, will likely cause BTC to slide if equities see weakness:
“Bitcoin will be free to put in whatever positive price action it can when the major markets idle. As they say “When the cats away the mice will play” The moment equities shit the bed again Bitcoin will follow.”
The analyst further explained that there’s also no telling which crypto companies, including Bitcoin exchanges, will be affected by the global fallout of a recessionary event, further putting BTC at risk of collapse.
This sentiment has been echoed by others. Per previous reports from NewsBTC, prominent TradingView analyst CryptoBullet wrote that a recession should be the last thing crypto investors wish for:
“When there are concerns in the economy, when everyone is worried about a crisis and losing jobs, the last thing people want to do is speculate on some crazy cryptocurrency.”
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