The Flippening? A Look at Bitcoin (BTC) Stability – and the Nasdaq’s Largest Single-Day Drop Since August 2011
As the Dow plunged into negative territory for 2018 following Wednesday’s 600-point drop, and the Nasdaq Composite Index posted a 4.4% slide, the largest single-day loss since August 2011, Bitcoin (BTC) has posted a $40-spread within the past 24 hours, according to WorldCoinIndex.
Bitcoin has been less volatile than NASDAQ, DOW and S&P 500 over the past month. (H/t @taiberg)
Long Bitcoin, Short the Bankers.
— Pomp 🌪 (@APompliano) October 25, 2018
BTC price action shows low volatility, with a 24-hour high of $6,489 and a 24-hour low of $6,449.
Source: WorldCoinIndex
The one-month BTC chart shows a trading range of $6,686 to $6,248.
The Dow is currently rallying, up +478.75 (1.95%) at time of writing, showing wild swings that suggest market volatility is not a Bitcoin phenomenon.
In the case of the traditional markets, long-term concerns about a looming recession are contributing to pullbacks and corrections.
Writing in February 2018, Desmond Lachman, a macro-economist at the International Monetary Fund and on Wall Street, says “all the ingredients are in place for a catastrophic economic and financial market crisis.”
“A key ingredient for a global economic crisis is asset price bubbles and credit risk mispricing. On that score, today’s financial market situation would appear to be very much more concerning than that on the eve of the September 2008 Lehman-bankruptcy. Whereas then, asset price bubbles were largely confined to the U.S. housing and credit markets, today, asset price bubbles are more pervasive being all too much in evidence around the globe.”
The Nasdaq has posted the largest percentage drop since October 2008.
The Nasdaq is down 12.15% for the month, the largest drop seen since October of 2008. The question to ask is whether or not that number will grow or recover some of those loses through the last five trading days of this month. $QQQ pic.twitter.com/01avp5789N
— Nicholas Merten (@Nicholas_Merten) October 24, 2018
P/E ratios tell us we're at dot-com levels of over-valuation. But as much as I fear a short-term pullback, it's key to remember that the US is strong compared to emerging markets. We're definitely approaching a recession, but it likely won't be like 2008.
— Nicholas Merten (@Nicholas_Merten) October 24, 2018
While crypto analyst and YouTuber Nicholas Merten, aka Data Dash, points out the big drop, he suggests an imminent recession won’t be as bad as the global financial crisis of 2008.
In his latest video, he talks about the October bloodbath in US stocks and the “fear indicators” that implicate economic uncertainty across the markets.
“Not only is the Nasdaq having its worst month since that month in October of 2008 but the Dow Jones, the S&P 500 and even less-known indices like the Russell 2000 are experiencing their worst month on record.”
“This is the first year that I’ve actually been bearish on equities… In one month, we’ve cut out practically all the gains of this year.”
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While the Nasdaq posted a 12.15% dip on the month on Wednesday, momentarily wiping out all gains for the year, Bitcoin is currently trading at $6,471, up 12.6% from one year ago today, when it was trading at $5,747.
The Nasdaq Comp, +3.34%, is currently up 11.9% from one year ago today.
