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After its worst day since the infamous Black Monday crash in 1987, the U.S. stock market is set to bounce back big time with the S&P 500 futures spiking four percent. According to trader Satoshi Flipper, this move could be bullish for Bitcoin, given its recent correlation with equities.
Global markets are in a freefall
The Dow index lost 3,000 basic points on Monday despite the Federal Reserve trying to assuage investors by cutting interest rates to zero.
The sell-off intensified during the last trading hour when US President Donald Trump was holding another press conference on the coronavirus. The POTUS mentioned that the US could be on the brink of a recession, which sent all major averages into meltdown mode.
European stocks also closed in the red with U.K.’s FTSE 100 plunging by nearly five percent.
Bitcoin is tied to stocks
While Bitcoin is commonly referred to as 'digital gold,' it continues to trade hand in hand with the U.S. stock market. Notably, both Tesla and Bitcoin, which were often compared by analysts in January, are now down roughly 50 percent from their yearly highs.
Anthony Pompliano of Morgan Creek Digital recently noted that Bitcoin was flat during the biggest stock market crash since 1987, but some rightfully pointed out that it had already been priced in because of futures.
The real question is whether Bitcoin decouples from the equities market after this liquidity squeeze.