A closely followed crypto strategist and trader is issuing a warning to Bitcoin holders that BTC could witness a big capitulation event amid weakness in the stock market.
Pseudonymous trader Cantering Clark tells his 146,700 Twitter followers that Bitcoin could witness a drop of nearly 40% from current levels if the S&P 500 (SPX) continues its bearish streak.
“If the S&P 500 drops down to the next major region between 3200-3400 [points], I think the right assumption would be that crypto beta would be at least 2-3x that, which at a minimum means Bitcoin retests the ledge of the highest volume node of the last five years – so around $12,000-$13,000.
I know people will quote idiosyncratic strength recently, which strength has been notable, but as soon as the SPX starts pulling multi-sigma moves downward in short time, all risk assets fall in line.”
On Friday, the S&P 500 closed at 3,585.61 points, 1.39% below its previous 2022 low of 3,636 points printed in June.
In the short term, however, Cantering Clark says Bitcoin bulls could inspire some confidence if they manage to reclaim the $20,000 price area.
“If we can break above these local highs, I think Bitcoin sees some momentum come in.”
Fellow pseudonymous analyst Jack also shares Cantering Clark’s outlook on BTC. According to Jack, Bitcoin will likely gather bullish momentum if it rallies above $20,000.
“I can be a bear all I want but if this jumps the creek, it’s a damn fine setup to long and good reason to divorce the narrative and play the technicals instead.”Â
At time of writing, Bitcoin is changing hands for $19,323, flat on the day.
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