4 Reasons Why Bitcoin Rises While the Crypto and Stock Markets Drop

摘要： The Bitcoin(BTC) price rose 0.8% over the last 24 hours while almost all every other crypto experienced a drop in price. Ethereum (Eth) fell around 2.5% over the last 24 hours, while Ripple (XRP) dropped 3.3% and Binance (BNB) also fell by 7%. The US stock markets have been suffering as well with the S&P, Dow Jones, and Nasdaq Futures all down.

There are four reasons to explain the stock market and overall cryptocurrency market performance, and why Bitcoin is different.

Record daily rise in new infections

In the ongoing coronavirus pandemic, many countries have seen fast growth in infection numbers. In the United States, new cases reached a new daily record of 86,000 and the total number or cases reached 8,834,393 people on Oct 29. There are similar numbers of infection cases in both India and Brazil, which are reported to be above 5 million each. With no end in sight for the Covid-19 pandemic. The economic recovery is still without a timetable and is causing panic in the mainstream and crypto markets. Many major industries have been fatally impacted and reshaped like Airlines and Tourism spreading pessimistic investor sentiment. Stimulus Plan uncertainty

The next round of economic stimulus in the United States is still up in the air and causing further uncertainty in the markets. Thomas Hayes, managing member at Great Hill Capital LLC in New York said, “Stimulus is now pushed back to after the election and the market is digesting that today".

Due to the pessimistic future caused by Covid-19, all three major US stock indexes reached a one-year low in March. On March 23, the Federal Reserve announced a monetary policy of unlimited quantitative easing (QE). Since then, we have seen a bull run in both the stock markets and the crypto market. As the assets' surge in price was driven primarily by abundant monetary supply, the correlation of bitcoin, and the whole crypto market with the stock market was also high.

Crypto market high correction with the stock market

Due to the new money supply of Unlimited QE, both the S&P 500 and Nasdaq reached record highs on Sept 2 while the Dow Jones followed on Sept 3. Tech giant,Tesla's stock was at a low of $70.10 on March 20 but reached a record high of $502.49 on Sept 1, a 700% increase in price.

For cryptos, Ethereum peaked this year at around $490 for a 2-year high on Sept 1.

However, Bitcoin is different, it reached around $12,470 of 1-year high on Aug 17.

Both the Dow and Nasdaq started to drop on Oct 13 and after a few days of consolidation, they experienced a second drop on Oct 23. This coincides with the day the overall crypto market started to fall, all except Bitcoin. Eth has experienced a 10.4% correction from $422 on Oct 23 to its current price $378. In fact, all major cryptos except Bitcoin have plunged since Oct 23.

For the stock chart, the double top signals are apparent, which is an indicator of a bearish market.

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