Bitcoin Drops to $55,000, Mirroring U.S. Stock Market’s Plunge

Bitcoin has fallen to $55,000 following significant losses in the U.S. stock market.

Azcnews Bitcoin Drops To $55,000, Mirroring U.s. Stock Market's Plunge

This decline has triggered widespread losses in the cryptocurrency market, fueled by negative sentiment surrounding Bitcoin’s historically weak September returns.

The downturn in Bitcoin and the broader cryptocurrency market coincides with the U.S. stock market’s losses. On Tuesday, the stock market extended its decline, wiping out $1.05 trillion in market value. Notably, the “Magnificent 7” stocks—Apple, Nvidia, Amazon, Meta, Microsoft, Alphabet, and Tesla—collectively lost over $550 billion in market capitalization within the past 24 hours, according to The Kobeissi Letters.

Evan Luthra On X
Evan Luthra On X

A similar trend is evident in the cryptocurrency market, where Bitcoin and several other top 20 cryptocurrencies are trading at daily losses. This movement underscores Bitcoin’s increasing correlation with traditional stock markets. Unlike in the past, when investors turned to Bitcoin for uncorrelated exposure, the influx of traditional investors—particularly with the introduction of Bitcoin ETFs—has altered this narrative.

Bitcoin’s recent decline aligns with its historically poor performance in September, which has proven to be the worst month for the cryptocurrency. On average, Bitcoin has suffered losses of -4.5%, with a median loss of -4.35%, the lowest returns compared to any other month.

A similar pattern has been observed in the S&P 500, marking September as the worst-performing month over the past 30 years.

Bitcoin Monthly Return
Bitcoin Monthly Return

This recent price drop occurred despite an increase in the supply of stablecoins in the cryptocurrency market, which is typically a bullish signal. As a result, a CryptoQuant analyst suggests that a significant portion of new capital has yet to be allocated.

“Most of the capital tied up in stablecoins hasn’t yet exerted buying pressure on the order books, but this ‘power’ could enter the market at any time,” the analyst noted. “It’s possible that institutional investors are acquiring digital assets through TWAP orders or using algorithms to minimize short-term price impact,” he added.

Meanwhile, Bitcoin’s recent price weakness has led to gains in Meta stocks and gold, challenging Bitcoin’s position as the second-best asset in terms of risk-adjusted returns.

Additionally, the BTC MVRV Z-Score has turned red, indicating that bearish sentiment is prevailing. A prolonged period with this indicator in the red zone could signal the beginning of a bear market.

Love

0.0/5

Love

Latest

Robinhood Launches Layer 2 Blockchain In Partnership With Arbitrum

News | Editor Choice | Policy & Regulations

Robinhood Launches Layer-2 Blockchain in Partnership with Arbitrum

Robinhood is doubling down on its crypto ambitions with the launch of its own Layer-2 blockchain, developed in collaboration with Arbitrum—a major step forward in supporting tokenized stock trading.

U.s. Department Of Justice Charges Four North Koreans In Nearly $1 Million Crypto Hack

News | Editor Choice | Policy & Regulations

U.S. Department of Justice Charges Four North Koreans in Nearly $1 Million Crypto Hack

The U.S. Department of Justice has indicted four North Korean nationals for allegedly posing as remote IT workers to infiltrate blockchain companies and steal nearly $1 million in cryptocurrency.

Could Eth Double To $5,000

News | Altcoin | Editor Choice

Could ETH Double to $5,000?

Ether (ETH) is facing a potential breakout to $5,000 driven by the “Power of 3” trading pattern, but selling pressure from whales and key technical resistance could hinder this bullish momentum.

Bitcoin Enters July Amid Key Macroeconomic Headlines

News | Bitcoin | Editor Choice

Bitcoin Enters July Amid Key Macroeconomic Headlines

Bitcoin ended June with a slight gain as investors shifted their focus from price movements to upcoming U.S. economic data that could determine the market’s next direction.

Nobitex Crypto Exchange Resumes Operations After $90 Million Hack

News | Editor Choice | Policy & Regulations

Nobitex Crypto Exchange Resumes Operations After $90 Million Hack

After a shocking $90 million hack, Iran’s crypto exchange Nobitex has begun restoring its services with strict security measures, allowing access only to verified users.