Bitcoin enthusiasts have been keen on spreading the narrative that the digital asset is a safe haven asset when the financial system fails. So, with the stock market doing exceptionally well and the financial system looking hunky-dory, does this mean a downturn for Bitcoin? Well, it looks that way right now.
The stock market has been doing well for the last few weeks, owing to optimism around China and the U.S trade deal. During the same period, Bitcoin, and the entire crypto market at large has slumped.
The good performance from the stock market has been accredited majorly to reports that China and the U.S were close to striking a deal. Some have even reported that there are talks of all tariffs being stricken off, opening up the two countries for more trade.
Additionally, the U.S government has been easing up on its monetary policies, printing out billions in the last few weeks. The monetary policies however as we know, only make a bad case worse. As recently noted by economist Nouriel Roubini who has been predicting a recession, this will do more harm than good in the long term.
On the trade deal, this is not the first time that a deal has looked close to signing. One of the two countries is likely to pull out at the last minute and send the market crashing again.
As we reported earlier, a deal is unlikely until the next U.S election because of China. The Chinese government would not want to strike a deal now, only to renegotiate again with a different president if Donald Trump doesn’t win in 2020.
Regardless of what has sparked the light in the stock market, it is a possible reason for why Bitcoin could be performing poorly at the moment
Coming into the weekend, the asset as we earlier reported has dropped to the $8,800 price level. The next bearish target would be $8,500 before we can see a bounce. The bullish target, on the other hand, is $9K with the $9,500 still the key resistance position that revives bullish sentiments.