SP500 to $5200: Has the stock market crash begun?

Why is the “Bitcoin” crash making Wall Street tremble?

Bitcoin has acted as a formidable leading indicator. After reaching peaks, the king of cryptos suffered a violent retracement, plummeting from $90,000 to nearly $60,000 during the first weeks of the year. Meanwhile, the S&P 500 and Nasdaq were flirting with their ATH, creating a deceptive decoupling.

Today, reality is catching up with traditional markets. The surge in 10-year US Treasury yields, which reached 4.41%, is exerting massive pressure on stock valuations. Investors are fleeing risk, and stocks are beginning to align with the bearish dynamic initiated by BTC.

Currently, Bitcoin’s price is hovering around $68,400, attempting to steady the ship. However, the correlation between rising bond yields and falling risk assets confirms that crypto had anticipated this macroeconomic shock with enormous precision.

Is the tech and AI market in danger?

In his latest report, trader and analyst DrProfit indicated he remains in a bearish position on the stock market and specifically on the market related to AI.

According to him, the final purge is about to arrive:

“The number of retail investors holding stocks has reached a record level, while insiders are selling at an unprecedented pace since September. The entire market is now seeking short positions, with every slight rise being exploited for new positioning. Retail investors are trapped and their panic is growing day by day,” he writes.

The trap is closing and the fear of this potential crash is increasing profit-taking and volatility in the crypto market.

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How far can the S&P 500 price fall?

The S&P 500, barometer of the stock market, is currently sitting on a crucial demand zone, a weekly order block. A rebound of the S&P 500 from this level is possible, but only a sustained hold above this level would manage to ease concerns.

Indeed, a loss of 6000 could push the S&P 500 toward its next support at 5200. This represents a potential drop of 20% in the coming months. Such a scenario could bring Bitcoin back toward its support at $52,000.

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