The Bitcoin (BTC) network uses the Proof of Work consensus algorithm. This requires a lot of computing power from the so-called miners, who verify the Bitcoin blocks with special mining hardware. The picture shows a Bitcoin coin mechanism on a circuit board.
While there are still concerns about a second lockdown in the financial markets, Bitcoin (BTC) was able to break away from the markets yesterday, Tuesday. The leading cryptocurrency attacked the $ 12,000 mark. But how sustainable is the growth and is Crypto Genius not still in the hands of the stock markets?
In this article we look at a recent tweet by the analysis company Weiss Crypto Ratings. These warn investors of the correlation between BTC and the stock market and the associated likelihood of price corrections.
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Weiss Crypto Ratings warns of Bitcoin correction
Weiss Crypto Ratings has issued a warning to investors that Bitcoin’s price could crash if the stock market downturn.
In a tweet published on October 16, the analyst warned that Bitcoin’s high correlation with the US stock market could lead to future price fluctuations.
Weiss Ratings uses the argument of possible economic uncertainty that could be caused by the presidential elections next month and that could lead to increased volatility on the stock and crypto markets.
US elections are associated with volatility
Let’s note that the basic tweet speaks of probabilities and scenarios. So the speech is in the subjunctive and in no way expresses certainty.
According to a report by IBTimes , the period leading up to the US election for traditional markets has historically been volatile. This means that both crypto and share prices can experience significant fluctuations during this period. The result itself and any uncertainties surrounding the announcement of the election winner can also lead to increased volatility.
The report – rightly – suggests that Bitcoin has been strongly correlated with traditional stock markets since the market crash in March 2020. The question here is whether, and if so, when Bitcoin will manage to free itself from the hands of the stock markets.