Not bitcoin single: the American stock market survived a historical fall

Prominent representatives of the traditional financial system have repeatedly criticized bitcoin and other cryptocurrencies for excessive volatility, low liquidity and unsecure. Throughout January, when the digital currency market has been seized by large -scale correction, accelerating in recent days, many of them considered this a confirmation of their words. However, the bears managed to bring down the American stock market.

On Monday, February 5, American indices s&P500 and Dow Jones decreased by 4.1% and 4.6%, respectively. Loss 1 175.21 points in just one day for Dow Jones has become a negative historical record. The richest people of the planet lost $ 114 billion, and the head of the Berkshire Hathaway investment holding Warren Buffet, who is also a critic of bitcoin, suffered most of all. Buffett, the third richest person in the world according to Bloomberg, lost $ 5.1 billion, followed by Facebook Mark Zuckerberg ($ 3.3 billion) and CEO Amazon Jeff Bezos ($ 3.6 billion).

At the same time, the capitalization of the cryptocurrency market demonstrated an exponential collapse from $ 390 billion to $ 276 billion in just 34 hours.

Bitcoin price for a while dropped to $ 6 048. Other cryptocurrency assets, including Ethereum, Ripple and Cardano, suffered equivalent losses.

Experts are convinced that after a long period of low volatility in the stock market and against the background of a rather positive US macroeconomic statistics, which can entail a more aggressive Fed policy regarding interest rates, a sharp correction is a natural phenomenon. In addition, most analysts are sure that trading bots using various high -frequency algorithms artificially aggravated downtrend. The cryptocurrency market after the rally made in December also needed correction, which was used by bears who operate a negative news background to intercept initiative from bulls.

The reasons that provoked the collapse of the cryptocurrency and stock markets can be different, but some correlation between the Vix Volatility index, better known as the “fear index”, which grew on a record 115% on Monday, and the cost of bitcoin is still observed. Historically, the VIX grows stronger, the lower the bitcoin falls, and this indicates the reverse proportionality. Note, this is not an axiom and should not be perceived as a trade recommendation.

On Tuesday, February 6, the stock market began to win back the positions, leading indices showed positive dynamics. Dow Jones grew by 0.21%, and S&P500 – by 0.11% as of 15:40 UTC. Bitcoin Gagarin News also returned to $ 7,000, and the industry froze in anticipation of the results of the hearings of the SEC and CFTCs in the US Senate. A positive news background of the United States can reinforce the bulls of bulls upstairs, otherwise the market, most likely, only expects a correctional ascending movement.

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