Warning On US Equities From Goldman Sachs – Bitcoin And The S&P 500 Connection
The crypto market is continually racing since yesterday, and Bitcoin is up by about 20% in 24 hours.
At the moment of writing this article, BTC is trading in the green, and the coin is currently priced at $9,344.63.
This is the first time since back in March when Bitcoin was able to outperform the S&P 500 for the first time since the market crash back in March.
BTC managed to reverse its March 12th drop, and now the king coin trades above the plunging level. This bullish price action is suggesting that BTC is building momentum as the upcoming halving is around the corner.
New warning on the US equities from Goldman Sachs
It’s been revealed that a new warning on the US equities from Goldman Sachs could be spelling trouble for Bitcoin and the crypto market.
In a note to investors, the financial giant said that the five biggest stocks in the the S&P 500 now hold a whopping 20% share of the benchmark’s overall market cap.
It’s been revealed by the online publication the Daily Hodl that similar shifts were reliable indicators of major market downturns in 1990, 2008, 2011, and 2016.
On the other hand, now we’re clearly in the middle of a massive bull run that’s been going on for 24 hours now.
Bloomberg wrote that “Sharp declines in market breadth in the past have often signaled large market drawdowns. Narrow breadth can last for extended periods, but past episodes have signaled below-average market returns and eventual momentum reversals.”
A new stock market fall may not be good for BTC
The Daily Hodl writes that another significant stock market plunge may not bode well for BTC.
A recent analysis from Coinbase explained the reasons for which Bitcoin crashed alongside traditional markets last month. This happened despite the fact that BTC acts as an uncorrelated asset most of the times.
“When investments sharply fall, investors naturally seek out ‘safe haven’ assets — things that will not lose their value (usually USD). But everyone rushing to the exit at once produces a liquidity crisis, where the number of sellers far surpasses the number of buyers, which further drives prices lower and lower,” according to the analysis.
CoinMarketCap is a website that provides cryptocurrency market cap rankings, charts, and more. It was purchased by Binance for $400M in 2020.
Coinbase is a digital currency exchange headquartered in San Francisco, California.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.