Bitcoin and Stock Markets Take a Hit – What’s Next?

The crypto market had a rough start to the week, with Bitcoin dropping to $76,500. But it wasn’t just crypto—Wall Street also took a hit, with major stock indexes losing value. Many investors are wondering: Which market will recover first?

Why Crypto and Stocks Move Together

According to crypto analyst Burak Kesmeci, Bitcoin and Ethereum are closely tied to the US stock market. This means when stocks go down, crypto tends to follow.

Kesmeci pointed out that Bitcoin has an 0.85 correlation with the S&P 500 (a key stock market index), while Ethereum’s correlation is even higher at 0.95. In simple terms, this means BTC and ETH move almost in sync with the stock market.

This link between crypto and stocks became obvious in past crashes. For example:

• March 2020 (COVID-19 crash): Bitcoin and the stock market both plummeted as investors panicked.
• May 2022 (Terra Luna collapse): Bitcoin lost 30% in a week, mirroring a stock market decline as investors rushed to sell risky assets.

Now, a similar trend is playing out. Whenever Donald Trump announces new trade tariffs, both crypto and stocks take a hit because investors become uncertain about the economy.

Why Gold Is Winning While Crypto Falls

While Bitcoin struggles, gold is reaching new highs. Why? Gold is seen as a “safe haven” during market uncertainty, while Bitcoin is still viewed as a high-risk investment—similar to stocks.

Kesmeci also mentioned the VIX (fear) index, which measures market uncertainty. When fear goes up, Bitcoin tends to fall, while assets like gold rise.

What Needs to Happen for Crypto to Recover?

Kesmeci says that for Bitcoin and the crypto market to bounce back, US stock markets need to recover first. Right now, key indexes like the Dow Jones (DJI) and S&P 500 are below their 200-day moving average—a key indicator of long-term trends. This is the first time this has happened since October 2023.

Until stocks regain strength, it’s unlikely that Bitcoin will make a full comeback.

Bitcoin Price Update

At the moment, Bitcoin is trading at $84,050, showing a 0.3% gain in the last 24 hours but still down 2% in the past week, according to CoinGecko.

With stocks and crypto both in a slump, investors are keeping a close eye on economic news, waiting for signs of recovery.