Fund managers dump US stocks at record pace — Can recession fears hurt Bitcoin?

2 weeks ago

Bitcoin’s (BTC) terms enactment has intimately mirrored that of the US equity marketplace successful caller years, peculiarly the tech-heavy Nasdaq and the benchmark S&P 500.

Now, arsenic money managers signifier a historical exodus from US stocks, the question arises: could Bitcoin beryllium the adjacent casualty?

Fund managers dump US stocks astatine grounds monthly pace

Investors slashed their vulnerability to US equities by the astir connected grounds by 40-percentage-points betwixt February and March, according to Bank of America’s latest survey.

This is the sharpest monthly diminution since the slope began tracking the information successful 1994. The shift, dubbed a “bull crash,” reflects dwindling religion successful US economical outperformance and rising fears of a planetary downturn.

With a nett 69% of surveyed managers declaring the highest of “US exceptionalism,” the information signals a seismic pivot that could ripple into hazard assets similar Bitcoin, particularly fixed their persistent 52-week affirmative correlation implicit the years.

More downside risks for Bitcoin and, successful turn, the broader crypto marketplace originate from investors’ rising currency allocations.

BofA’s March survey finds that currency levels, a classical flight-to-safety signal, jumped to 4.1% from February’s 3.5%, the lowest since 2010.

Adding to the unease, 55% of managers flagged “Trade warfare triggers planetary recession” arsenic the apical process risk, up from 39% successful February, portion 19% disquieted astir ostentation forcing Fed complaint hikes—both scenarios that could chill enthusiasm for risky assets similar Bitcoin.

Conversely, the survey’s astir crowded trades database inactive includes “Long crypto” astatine 9%, coinciding with the constitution of the Strategic Bitcoin Reserve successful the US.

Meanwhile, 68% of managers expect Fed complaint cuts successful 2025, up from 51% past month.

Lower rates person antecedently coincided with Bitcoin and the broader crypto marketplace gains, thing bettors connected Polymarket believe is 100% definite to hap earlier May.

Bitcoin terms hangs by a thread

Bitcoin’s terms has declined by implicit 25% 2 months aft establishing a grounds precocious of nether $110,000 — a dropdown many see a bull marketplace correction, suggesting that the cryptocurrency whitethorn retrieve successful the coming months.

“Historically, Bitcoin experiences these types of corrections during semipermanent rallies, and there’s nary crushed to judge this clip is different,” Derive laminitis Nick Forster told Cointelegraph, adding nevertheless that the cryptocurrency’s adjacent six months beryllium connected however accepted markets (stocks) perform.

Technically, arsenic of March 19, Bitcoin was holding supra its 50-week exponential moving mean (50-week EMA; the reddish wave) astatine $77,250.

Historically, BTC terms returns to the 50-week EMA aft undergoing beardown rallies. The cryptocurrency’s decisive interruption beneath the question enactment has signaled a carnivore marketplace successful the past, namely the 2018 and 2022 correction cycles.

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A wide breakdown beneath the question enactment could person BTC’s bears oculus the 200-week EMA (the bluish wave) beneath $50,000, echoing the downside sentiment discussed successful the BofA survey.

Conversely, holding supra the 50-week EMA has led prices to caller sessional highs, akin to what the marketplace witnessed successful 2024. If Bitcoin recovers from the said question support, its likelihood of investigating the $100,000 intelligence absorption level is high.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.

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