Wells Fargo expects US corporate pensions to invest approximately $ 35 billion in fixed income securities. Analysts believe that this can lead to a strong sell-off on the stock exchange. Given the correlation between Bitcoin and stocks, this could make BTC vulnerable to withdrawal.
The managing director of KKM Financial, Dan Deming also warned that increased volatility in the equity markets could lead to the fall of various risky assets.
Will bitcoin fall along with the stocks?
The correlation between Bitcoin and the SP 500. Source: Skew
Since late March, the evolution of Bitcoin prices and the SP 500 index have shown a surprisingly similar correlation, and skew data shows that Bitcoin prices have recovered against the U.S. stock market in the past three months. .
In the same way, Bitcoin started falling in the first week of June when stocks fell.
Wells Fargo and KKM believe that stocks are primarily corrected After all, pension funds and other institutional investors could prepare to make profits after a massive recovery in the stock markets.
The same argument for a pullback can be applied to Bitcoin: The company saw an upward trend of 159%, rising from $ 3,600 to $ 9,330 since March 13.
“The end of the quarter will be pretty interesting considering how much the market has moved this quarter. There could be volatility here, we’ve seen this before, and there is potential for more if we end of the second quarter. “
While fears of the stock market continue to grow due to the likelihood of a massive sale, The cryptocurrency market expects a record $ 930 million in bitcoin and ether options to expire on June 26.
Options contracts give investors the right to buy Bitcoin at a specific price and date that was previously agreed. As the period expires, there may be an increase in buying and selling volumes and a sharp increase in volatility.
Selling BTC miners remains a threat
In addition to the expected increase in volatility, another variable in the short-term price development of Bitcoin it is the sudden increase in mining sales pressure.
After a two-year high adjustment in mining, Miners have started selling Bitcoin again. Miners’ sales are a major source of external pressure on BTC, and the other is exchange-based commission settlement.
When Bitcoin’s price fell below $ 9,300 today, Ki was Young-ju, CEO of CryptoQuant said::
“If you know when the miner sends money to the exchanges, you can determine when the price of BTC will fall. The amount of BTC sent doesn’t matter if you look at the Minero flows to the exchange. “
Bitcoin miners are starting a massive sale. Source. CryptoQuant
When risky assets get into a phase of fear triggered by the increase in coronavirus infections and the possibility of a correction on the stock exchange, The coincidence of Friday’s options expiration and recent miners’ sales could increase the likelihood of a strong withdrawal in the cryptocurrency market.