What Happened To The $6,700 Bitcoin?

In the wake of the plunge in the stocks, many experts believed that a new surge will make headlines in the daily cryptocurrency news. However, Bitcoin (BTC), as the leader of the crypto herd, did not manage to sustain the momentum around the $6,700 margin or break through to $7,000.

Instead, the major cryptocurrency fell below $6,300 while most of the top altcoins suffered even more, plunging by 12% to 14%. Despite the consideration that Bitcoin and major altcoins are considered as a robust store of value for investors to hedge against the market (in times of stock crashes), this time the drop in stocks led to a drop in the crypto market too.

In a recent interview, the vice president of research and development at Bitwise Asset Management Matt Hougan, recently stated that the fundamental drivers of crypto are different from the ones of the traditional finance markets.

According to Matt Hougan:

“Non-correlation is not the same as inverse correlation so there’s no guarantee that when the market goes down crypto will go up. Over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the low correlation to persist,”

On October 11th, the decline in value of the stock markets led to big losses. For example, Jeff Bezos (CEO of Amazon), who is the richest man in the world, lost more than $9.1 billion in personal net worth in only 24 hours.

Another popular crypto analyst and trader named Alex Kruger said that a breakout of Bitcoin above a major resistance level could lead to a large drop in value – allowing the dominant cryptocurrency to see a massive increase in demand.

“A BTC breakout today, in a day when stocks and bonds are getting crushed, would be noticed by the whole world and would be very bullish. Waiting,” Kruger stated.

However, he also noted the correlation between stocks and traditional assets and its weakening over the past year, adding:

“Treasuries and Gold are two assets widely used as portfolio hedges. Correlations with stocks broke down in 2018. Hence, in the event of a market crash, portfolios may suffer losses both from the stocks side and the hedge side. Forcing PMs to sell assets, accelerating a crash.”