Experienced cryptocurrency analyst and trader Bluntz, who knows every move of Bitcoin (BTC), warned that a weak stock market could trigger a new wave of selling in the cryptocurrency market. According to the analyst, the stock market is on the verge of a decline, which could result in a drop in Bitcoin and altcoins.
S&P 500 Risk for Bitcoin and Altcoins
Anonymous cryptocurrency analyst and trader Bluntz stated that the stock index S&P 500 seems to be struggling at the 0.618 Fibonacci level after a three-wave rally. Bluntz made predictions based on Elliott Wave Theory, a technical analysis approach that attempts to predict future price movements by interpreting the psychology of market participants, which tends to manifest in waves. According to this theory, an asset in a downtrend tends to make an ABC rally before continuing its downtrend.
The analyst emphasized that it is not yet time to switch to the side that expects a rise in either the stock market or the cryptocurrency market, saying:
The stocks made a nice rally from low levels, but they seem to have stopped at the 0.618 Fibonacci level, and so far, there has only been a three-wave rally. Therefore, they currently give a somewhat negative impression. If they start moving downward, it will likely be enough for the cryptocurrency market to fall as well. Stay on the safe side, and in my humble opinion, it is not yet time to take a position by expecting a rise.
Expecting Bitcoin to Retreat to $23,000
At the time of writing this article, the S&P 500 is trading below the 0.618 Fibonacci level at 4,496 points, below the 4,520 points. Bluntz’s latest analysis is consistent with his previous call that the largest cryptocurrency, Bitcoin, will likely see more correction or a decline before forming a local bottom.
The analyst previously predicted that BTC would likely drop to around $23,000 before starting a new uptrend. According to CoinMarketCap data, Bitcoin is currently trading at $25,612 with a 0.50% decrease in the last 24 hours.
