Bitcoin Price Recovers as Dow Suffers Worst Week in a Decade
The latest equity market data makes for pretty grim reading for conventional equity traders, as it shows that the Dow Jones Industrial Average has suffered its worst week since the global financial crisis of 2008. According to the data, the Dow lost 1,655 points or about 7 percent in its worst week-on-week decline in 10 years with no immediate sign of recovery on the horizon.
CNBC reports that the Federal Reserve’s rate hike on Wednesday and fears of an extended government shutdown on Friday are instrumental to the losses suffered in the financial market. Alongside the Dow, the S&P 500 fell 2.1 percent to close at 2,416.58, and the Nasdaq Composite lost 2.99 percent at 6,332.99, following significant losses in technology stocks such as Facebook, Amazon, and Apple. Both the Dow and the S&P 500 are in the red for 2018 by at least 9 percent, and both are also preparing for what looks to be their worst December performance since the Great Depression of 1931.
Quoted in the report, Komal Sri-Kumar, president at Sri-Kumar Global Strategies, said:
There are lots of signs now suggesting that we may be looking at a recession. I would say that the risk here is that a whole lot of confluence is taking place: The trade was is not going to end soon, and the Fed totally misjudged the market in suggesting two more rate hikes next year.
Bitcoin Holding Out as Equities Drown
While the Dow is looking at the possibility of a recession after nearly eight years of bullish equity market conditions, bitcoin is experiencing a bit of a reprieve after enduring its own annus horribilis, falling from a peak of $19,500 over the course of a long drawn out year where it found itself unable to rise amidst severe uncertainty. For now, there is no telling when current conditions will finally come to an end.
At the moment, however, BTC/USD continues to hover around $4,000, holding steady at $3,992 at press time following a mini-recovery that took it from a year-to-date low approaching $3,000 last week. Speculation among a number of analysts is that a squeeze of short contracts on margin trading platforms led to a market situation where many oversold cryptocurrencies including bitcoin went through a corrective upswing.
While many believe that the only way for bitcoin to recapture its all-time high valuation is through the entry of institutional investors into the crypto market, others like Bitpay CEO Stephen Pair believe that a more user-driven approach to bitcoin adoption can achieve the same goal. Amidst the uncertainty and competing visions for bitcoin’s future, a few notable voices continue to make optimistic pronouncements about the asset’s performance in the short term. One of these voices belongs to Fundstrat co-founder Tom Lee who previously said that bitcoin could hit $15,000 by the end of the year but has since stopped giving bitcoin price predictions.
Featured Image from Shutterstock. Charts from TradingView.
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