A widely followed crypto analyst is warning that Bitcoin (BTC) may see a market correction if the stock market recovery stalls out.
In a new video update, crypto strategist Jason Pizzino tells his 350,000 YouTube subscribers that S&P 500 (SPX) may dip lower in the second quarter and drag Bitcoin down with it, based on BTC’s historic correlation with stocks.
Pizzino suggests the SPX may swing lower in the second quarter based on its historic performance pattern.
“I’ve got our 20-year line on the [S&P 500] chart here, and we’re just using this to look at the swings of a market…
With that in mind, you can see we’ve had a similar event here starting from about December into these peaks of February, running down into April, and then May has this little bit of a drop, along with June also having a correction. It gets a bit messier through the second half of quarter two and quarter three, then things start to get a little bit cleaner towards quarter four. And that’s why I’m still considering that Bitcoin does have a correction in quarter two. We’ve been up for a few weeks here. Generally, we’ll get some sort of correction.”
Pizzino also says that Bitcoin may gain bullish momentum based on its historic inverse correlation with the US dollar index (DXY), as more investors may be treating the flagship crypto asset as a safe-haven asset similar to gold.
The DXY, which has been declining, pits the USD against a basket of other major foreign currencies.
“There’s a strong downtrend for the US dollar. It has paused here. So that’s not a bad sign at the moment, especially with Bitcoin still going up. US dollar pausing, could see some further strength for BTC in the coming weeks, after any sort of correction.”
Bitcoin is trading for $97,346 at time of writing, flat on the day.
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