Before all the fun began a few weeks back, I offered the idea that weakness in Bitcoin, of all things, would break the stock market. I pointed to $90,000 as a key psychological level, and indeed, as that level broke, stocks came along for the ride. This is nicely illustrated with the layered chart of $BTC and SPY, which are in virtual lockstep.
The path of Bitcoin has been politically-driven. The lifetime peak (and perhaps the ultimate peak) was on Inauguration Day itself. From there, it started to slide steadily, and once it broke $90,000, the drop was faster. There was one more political “paddles-to-the-chest” moment when the comical Strategic Reserve Fund was announced which, as I also predicted, turned out to be a giant nothing burger, even though the excitement pushed BTC a bit above resistance (red square). In any case, from Inauguration until yesterday, the drop was something like $30,000 (!!!!!), and my view is that we’re about to turn south again.
But at least there’s absolutely no more overlap between politics as crypto, as this morning’s headlines prove.
