Cryptocurrency market update: Bitcoin defends support in tandem with global stock indices recovery

Bitcoin led the global cryptocurrency market in a nerve wrecking rollercoaster ride yesterday. Digital assets, and especially the major assets fell head first into muddy waters. Moreover, the continued to sink below lifeline support areas. Interesting, the global stock market was experiencing a similar trend.

Read more on that story here.

Before the waterfall plunge on Thursday, October 11, Bitcoin was in consolidation along with the other coins and altcoins. Several experts and analyst head predicted a bullish breakout following the impressive consolidation. However, the market disapproved all the predictions leading to a $16 billion loss in the entire cryptocurrency market. Bitcoin, for example tanked 5% while the rest of the top ten cryptos corrected lower by over 10%.

Nevertheless, the slide interestingly occurred amid a global stock indices drop. From time to time experts and analysts have reminded as that cryptocurrencies are not correlated with the stock market. However, the price correction yesterday proved a fact that non-correlation does not entirely mean inversely related.

On Wednesday, October 10, the global stock market embarked on a downward trend where Dow Jones, Nasdaq and even S&P 500 suffered heavily at the hands of the bears sending jitters in the entire global market. Nasdaq, for instance, declined 4% while Dow Jones Index plummet by at least 832 points on the day. The drop was not only recorded by the above stocks but other companies including but not limited to Nike, Visa, Apple, Boeing, Amazon, Netflix and Adobe suffered too.

Significantly, this was not the first time that the stock market corrected alongside the crypto market. Earlier in the year, February to be specific saw the two market correct simultaneously.

Furthermore, the recent drop was so sudden and utterly surprising to many investors and experts because, just like week a report surfaced that showed that institutional funds were already trickling into the crypto market. This was definitely a brew for a surge because investors believed that the impending bullish breakout in the market would lead to a fall in the stock market.

To put this into the right perspective, Bloomberg interviewed matt Hougan, who is the VP of Bitwise Asset Management. Hougan said that the drivers of traditional markets differ greatly with the stock market. Moreover, lack of correlation with the digital assets should not be interpreted as inverse correlation. Hougan said:

“Non-correlation is not the same as inverse correlation so there’s no guarantee that when the market goes down crypto will go up. Over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the low correlation to persist.”

Bitcoin is currently stuck in range below $6,250. At the same time, the crypto is supported strongly at $6,100. BTC/USD is trading at $6,208 while using the moving average support slightly below $6,200.

Read more on the latest Bitcoin price analysis here.