Bitcoin At Risk Of Plunge Through Support If Stocks Turn Down

2021-1-28 18:30

The overextended stock market bubble was already close to bursting, but some recent turmoil involving skyrocketing GameStop shares and a Reddit-driven short squeeze might break the already thin ice. If this happens, and the stock market turns down in a big way while Bitcoin is on critical support, there could be another sharp plunge across the greater market.

GameStop: The Short Squeeze That Rocked The Stock Market

Legacy markets are in an uproar today, following the ongoing epic short squeeze in GME shares. Melvin Capital, a large hedge fund, opened a sizable short position against the aging video game retailer. Users of the WallStreetBets sub-reddit instead bought up shares, driving up prices and causing one of the largest short squeezes on record.

Losses are said to have reached in the billions, while GME shares have risen from a 2021 open of under $20 to just under $350 at the time of this writing. Losses are said to have reached the billions. Meanwhile, those involved in the plan have shared screenshots proving they’ve turned $50,000 positions into upwards of $20 million.

RELATED READING | THE THREE FACTORS THAT COULD TOPPLE THE RECENT BITCOIN RALLY

GameStop shares being this overvalued is a sign that the current bubble and market exuberance is spiraling out of control, and its causing overall market sentiment to shift.

If legacy markets like stocks begin to turn, all while Bitcoin is on the ropes at $30,000, it could lead the crypto market into a much deeper plunge.

 

Legacy Markets Turning Down Could Take Bitcoin Down With It

The same panic isn’t in the air as the last time the stock market took down Bitcoin but the risk remains high of the prior correlation returning. After Black Thursday, stocks and crypto entered a bull market despite the state of the economy.

From the lows set that day, Bitcoin climbed 1000% from $3,800 to over $42,000, and major US stock indices all set new all-time highs and then some.

But with exuberance reaching levels of insanity, negativity surrounding the recent situation beginning to shift sentiment, and with both crypto and legacy markets on thin ice, a much deeper selloff could ensue.

What investors and traders will need to figure out from there, is if it is an opportunity to get into position lower in preparation for another leg up, or if the bubble has popped and the upside is over for some time.

RELATED READING | BITCOIN ON-CHAIN DATA INDICATES EXTREME PROFIT TAKING UNDERWAY

Markets are indeed irrational currently, but according to famed economist John Maynard Keynes, “markets can stay irrational longer than you can remain solvent.”

Melvin Capital learned this the hard way, and if markets turn down from here, others will too.

Featured image from Deposit Photos, Charts from TradingView.com

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Market.space (MASP) на Currencies.ru

$ 0 (+0.00%)
Объем 24H $0
Изменеия 24h: 0.00 %, 7d: 0.00 %
Cегодня L: $0 - H: $0
Капитализация $0 Rank 99999
Доступно / Всего 0 MASP

market down stock bitcoin support plunge turns

market down → Результатов: 126


Despite Bear Market, Bitcoin Remains the King with Highest 2019 YTD Returns than Traditional Markets

Bitcoin is currently down about 80 percent from its all-time high (ATH) of $20,000 from December 2017. Throughout the last year and still in 2019, the leading cryptocurrency by market cap of $92 billion is in a bear market which saw its lowest yearly level at $3,200 in December 2018. At the time of writing, […]

2019-4-19 20:37


Another One ‘Bits’ the Dust as Coinnest Crypto Exchange Shuts Down Services in South Korea

Coinnest Shuts Down Services in South Korea Even though there have been signs that the market has been improving over the recent bear market, not everyone has managed to survive through this time. Unfortunately, one of the companies to succumb to the damaging effects of bearish trends is Coinnest, a cryptocurrency exchange located in South […]

2019-4-18 22:30


Bitcoin [BTC] proponent Adam Draper: There will be more digital currencies than fiat in 10 years

The proponents in the cryptoverse have played a major role in controlling market sentiment and its updates and developments. In his latest podcast, Anthony Pompliano, the Founder of Morgan Creek Digitial Captial sat down with Adam Draper, the Founder of BoostVC and Bitcoin [BTC] supporter to discuss the state of the cryptocurrency market right now.

2019-4-18 21:31


This Billionaire Investor is ‘More and More Bullish’ in Crypto and Bitcoin

By CCN. com: Michael Novogratz, the billionaire founder of Galaxy Digital formerly of Fortress Investment Group, has said he has become much more bullish in bitcoin and crypto in recent months. “I am more and more bullish BTC and our whole space,” he said despite the bitcoin price being down about 74 percent from its all-time high.

2019-4-18 16:45


Dow Flinches After $6 Trillion Asset Manager Screams ‘Melt-Up’

By CCN: The Dow Jones rally looked like it planned to kick back into gear on Tuesday, as the stock market bellwether and its peers all assembled strong opens. However, the DJIA gave up nearly 100 points after the world’s largest asset manager warned that the markets could enter a worrisome trend – one that could potentially hamstring President Trump’s reelection campaign.

2019-4-16 16:35


Фото:

IDEX CEO: Facebook, JPMorgan Taking Interest in Crypto is Optimistic, But There’s a Catch

Decentralized exchanges (DEXs) have rapidly become a hot topic in the ongoing crypto bear market. NewsBTC took some time to sit down with Alex Wearn, the chief executive of AuroraDAO, the company by the popular IDEX exchange, to talk about this crypto subsector, mainstream Bitcoin adoption, and this innovation’s long-term prospects when pitted against the.

2019-4-15 17:15