Today – bullish investors in the stock market saw stocks dip to one of the lowest points of 2022.
Stock trading reached a record low in the year, likely as a result of the Fed interest raising policies affecting the stock market.
In general, Cryptocurrencies almost always mirror the price movement of stocks when the derivative is an external government policy affecting the price of “risk” assets.
Today, the S&P 500 set a new closing low for 2022, while the Dow Jones Industrial Average entered a bear market as interest rates rose and global currencies were shaken.
The Dow fell 329.60 points, or 1.11%, to 29,260.81, with losses intensifying in the last minutes of trade. The 30-stock index is down around 20.4% from its peak on January 4th. The Nasdaq Composite Index dropped 0.6% to 10,802.92.
Despite this significant movement in the stock market, cryptocurrencies like Bitcoin stood pretty stable throughout the day.
On Monday, the top cryptocurrency by market size was trading at over $19,000, while the S&P 500 was down 1% for the day. In fact, digital assets appear to be competing with the dollar as the best-performing asset in the third quarter.
Many are now wondering if the lack of volatility is a potential indication that cryptocurrencies “bottomed out” in the bear market.
The absence of volatility may indicate that cryptocurrencies have bottomed out during the bear market.
Stocks and cryptocurrency have both been steadily declining as the Federal Reserve tightened its monetary policies throughout the year.
Bitcoin and cryptocurrency have historically had a strong association with equities. That is, whether markets rise or fall, Bitcoin will usually follow suit with even higher volatility.
Another possible reason for this discrepancy between cryptocurrencies and stock is the fact that whales might be coming back to the market.
As the Fed’s interest policies began to show results, big players could be entertaining the idea of investing more heavily in cryptocurrencies.
On September 23rd a report stated that a whale bought US$ 3.12 billion in Bitcoin.
On that date, over 166,000 Bitcoins were transferred from cryptocurrency exchanges to unknown wallets in the previous 24 hours, according to Whale Alert.
The total value of all recorded transactions exceeds $3.12 billion.