Unchained Analyst Reports Bitcoin’s Strength Despite Stock Market Decline
As the U.S. imposes tariffs on a majority of its trading partners, the stock market sees a downturn, while Bitcoin demonstrates a degree of resilience. An expert from Unchained elaborates on this observation.
U.S. stocks have been facing significant declines, marking some of the poorest performance in recent years. In contrast, Bitcoin (BTC) has demonstrated notable resilience, a positive sign for institutional investors, according to Joe Burnett, Director of Market Research at the cryptocurrency financial firm Unchained.
On April 4, the Dow Jones Industrial Average fell by over 2,200 points, following a decline of 1,679 points the previous Thursday. This marked the most severe two-day decline on record, leaving many investors in equities feeling concerned over the weekend.
In contrast, Bitcoin exhibited relative stability, even beginning to recover, and secured a 2.2% increase in the past 24 hours. Burnett mentioned that this mirrors the trend from 2020 when Bitcoin prices initiated the market recovery.
Reflecting on March 2020, Bitcoin quickly bottomed out and rebounded first (ahead of U.S. equities), a trend that may be repeating itself today as Bitcoin has not reached new lows since March 11th.
Given Bitcoin’s inherent volatility, Burnett noted that it is typically the first asset investors liquidate when liquidity becomes scarce. However, the rapid and aggressive nature of these sell-offs often leads to Bitcoin reaching its bottom before equities do.
This development might also suggest that stocks are approaching a bottom. This hypothesis is supported by the AAII investor sentiment survey, which declined to 19.11% on March 13, the lowest mark since the pandemic began. Such a severely negative sentiment might indicate that a stock reversal is imminent.
Nevertheless, Burnett urged caution, stating that this does not guarantee Bitcoin’s safety.
Certainly, if stocks continue to fall sharply over the following weeks, it’s reasonable to anticipate that Bitcoin may also face another downturn.