Predict the exact behavior of Actions it is an impossible task. Some tools, like the technical analysiswhich studies the evolution of the supply and demand of an asset based on its historical prices, help to estimate potential movements, but never with 100% certainty.
Other analysis methods are based both on the correlations between assets, that is, on how one behaves against the other, and on market sentiment, measuring the “mood” of investors and operators.
Currently, to try to project how the stock markets will open, look at the bitcoin evolutionand of the cryptocurrencies in general, it could be very useful, since it merges the three mechanisms mentioned above.
According to Mark Mobius, who co-founded Mobius Capital Partners after working for more than three decades at Franklin Templeton Investments, “the cryptocurrencies they are a measure of investor sentiment.” “Bitcoin falls, the next day the Dow Jones falls. That’s the pattern you get. That shows that Bitcoin is a leading indicator,” added the specialist.
Later, he explained that only when the large institutional investors and retailers actually give up and “throw in the towel”, failing to put money into the market for losses, bearish sentiment bottoms out. “That’s the time to start shopping Actions”, sentenced Mobius.
From the maximum of November 2021 to the present, the price of bitcoin accumulates a drop of 70%. Meanwhile, the Dow Jones, S&P 500 and Nasdaq 100 indices fell 17%, 20% and 31%, respectively, in the same period.
Already at the beginning of the year, looking at the last 100 days, the correlation between bitcoin and the technology index was greater than 0.4, marking the highest figure since 2011. Keep in mind that a correlation of 1 means that the analyzed assets move in unison, while a correlation of -1 means that they behave in exactly the opposite way.
Taking this relationship into account, Mobius commented that as long as bitcoin investors “keep talking about buying dips, that means there is a feeling of hope,” which “also means we haven’t hit the bottom of a bear market.” .
For Peter Schiff, current CEO and chief global strategist at Euro Pacific Capital, “Bitcoin appears to be about to collapse to USD 20,000 and Ether to USD 1,000.” “If so, the total market capitalization of nearly 20,000 digital tokens would sink below $800 billion, from nearly $3 trillion at its peak. Don’t buy this drop. You will lose much more money, ”said the executive through his Twitter account.
Although he did not explain the basis for establishing such a projection, the truth is that the zone of USD 20,000 of bitcoin is not only relevant because it is a “round number”, but also because it approximately coincides with the peak of December 2017.
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