Can we use the price of Bitcoin as a leading indicator for the price of the indices. Watching the charts of the two instruments, we see that this dependence has been fulfilled three times. After the first decline in the Bitcoin price, followed a fall in the stock markets, after which the rebound of the crypto hit again before the SPX reversal. A little later, this dependence was retained at the double top and subsequent decline.
This dependence may have been caused by the serious interest in crypto hedging, a trend that has been popularized in the last year since the boom in the digital currency market.
Currently, we see a correction and a rising impulse in the indexes (SPX on the chart), but considering that Bitcoin made a new bottom whether this should signal a likely new downturn in the stock market. We remain cautious in front of the US stock market opening for possible new short positions in the indices. The current correction gives a better price for adding to short positions or starting new ones.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.