Bitcoin has suffered a lot from fear of bringing negative signals to the market.

Fraudulent sales that previously stagnated businesses, new businesses and PSPC businesses losing millions are now taking place in Bitcoin, the world's largest cryptocurrency, adding high risk to small traders and brokerage houses. high.

the market is not stable

This year, investor safety in the uncertain economic environment has pushed the S&P 500 up 21%, but the forecast drop has been worrying. The hawkish Fed and Omicron variant exchange has been reported to have reduced the market value of cryptocurrencies by more than 10%, the market value of newly listed companies is $ 50 billion, and the market prices of commodities. memes have dropped. . up to 14%.

Short-term decisions by traders have been tried in the past, but investor attitudes can change without the constant support of big business. The behavioral changes of the big banks in the midst of last week's inflation resulted in a big shift in the risk averse market, with experts taking risk at the fastest in 20 months.

Due to the negative returns, a drop in assets like Bitcoin could lower investor confidence even further. Overall, the wealth available to cryptocurrency traders was around $ 250 billion less than when the market began to decline on November 26, which could further stress the stock market economy.

Matt Maley, Senior Market Strategist, Miller Tabak Co. said: Anything more important can affect the improvement in the bull market. "

Additionally, if Bitcoin, the world's largest cryptocurrency, continues to trade, the market will face more turbulence. Since the market closed last Friday, Bitcoin has fallen 21% and traded for the week, once falling to around $ 42,290, better than its all-time high of nearly $ 69,000 a few weeks ago. At the same time, the open position of Bitcoin futures contracts is still down and profits on some major exchanges have gone bad, meaning short-term holders have paid a price. In the middle of a clearing frenzy.

Bitcoin is a dangerous asset

On the flip side, the drop in stock markets and cryptocurrencies last week further proves that Bitcoin is still an incomplete hedge against financial institutions.

In a recent report by President Mangroup, the relationship between Bitcoin and key assets is close to zero, but every time the market has lost more than 5% in the past month in the past ten years, the Bitcoin currency has fallen. of 86% and an average of 13%.

Maley said, “Bitcoin is considered one of the most important risk-taking / risk-free assets. So this week will be another important warning for the stock.” It's worth the risk, especially if the price of Bitcoin stays low and continues to fall. "

Matthew Tuttle, CEO of Tuttle Capital Management LLC, agrees. He pointed out that although the cryptocurrency bull market prefers to view Bitcoin as a hedge rate hike, it is more profitable.

Tuttle said in an interview. “Real estate sales are not good for the stock market because it is affected by the risk / risk aversion point of view,” Tuttle said in an interview. all thoughts. "

Must cancel sale

The brains of traders have been spinning steadily over the past week, and reputable companies have been hit hard as well.

Casey Wood's “Wood sister” ETF ARKInnovation fell almost 13% last week, its worst week since February this year. The SPAC index fell 6% over the same period, the worst performance since March. An ETF from investment firm VanEck, which tracks the most popular online companies, also fell almost 9% last week.

High-tech devices were also not short of sales last week, and among them, Metaplatform (FB.US) fell nearly 8% last week, causing sales of many large commercial products to collapse. .

Doug Ramsey, Chief Financial Officer (CIO) of Reutthold Group, said: “The current internal metrics that measure oversold conditions in the stock markets are very onerous.” I don't know what to do next. I am very worried about this. "