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Speaking to CNBC host Joe Kernen during a recent episode of Squawk Box, Katie Stockton, founder and managing partner at Fairlead Strategies, stated that she believes the Bitcoin chart is broken and expects the flagship crypto to start going down along with the stock market.
"$27,200 is a likely support level"
The expert has referred to the crypto market as "eerily quiet" now, speaking about Bitcoin in particular.
Stockton stated that long side movements of Bitcoin are quite able to break the current support level. Citing Fibonacci technical levels, she named $27,200 as a likely level where Bitcoin may find the next support when it begins dropping.
Besides, the founder of Fairlead Strategies pointed out a strong correlation between Bitcoin and the Nasdaq 100, and the S&P 500 indexes, which are going down at the moment, stated that Bitcoin should be considered a risky asset now as it may follow those stocks.
As for the stock market, she expressed a view that nothing positive can be said about this market now from the technical analysis side.
"It feels a little eerily quiet right now in the #bitcoin market or #crypto in general," says @StocktonKatie "But the bitcoin chart is broken by my measures ... it puts next support around $27,200." pic.twitter.com/R9qbKCFss9— Squawk Box (@SquawkCNBC) May 5, 2022
Bitcoin drops to $38,870 after historic rate hike
On May 4, the Federal Reserve implemented a long-expected rate hike by half a basis point—the highest increase of interest rates in 22 years. On that day, Bitcoin first responded to this historic event with an almost 3% increase, showing stability and even small growth—to the $39,868 level.
However, today, the leading cryptocurrency began to decline, erasing this gain and dropping further. At the time of this writing, Bitcoin is trading at $38,802.
The Nasdaq composite index has fallen 3.37% today. The S&P 500 is down 2.51% today as well.