Bitcoin prices were under pressure on Thursday, and the world’s No. 1 crypto could see further bearish pain in the near term if stocks continue to buckle, according to an analyst.
At last check, bitcoin
was changing hands at $51.743 on CoinDesk, with the asset briefly touching a low at $50,458.10 over the past 24 hours and trading around its lowest point in over two weeks.
Values for the crypto are off more than 11% so far this week, FactSet data show.
And at least one analyst fears that the crypto asset could come under pressure as a host of speculative assets have been coming under steady selling pressure so far this week. Bitcoin is often perceived as being uncorrelated with stocks and other assets but it has lately been moving in tandem with selloffs in crude-oil futures, and stocks, with declines in so-called risk assets coming as the U.S. dollar has gained some traction higher.
For that reason, Fawad Razaqzada, market analyst at ThinkMarkets, in a Thursday note cautioned investors to watch out for more pressure on bitcoin that could take it beneath $50,000.
“Judging by recent events, traders seem happy to be selling into the rallies rather than buying the dip. So, don’t be surprised if we see renewed weakness in the markets later on in the session,” he wrote.
“If so, this could be further bad news for Bitcoin. The crypto has been correlating positively with risk assets over the past year and if that relationship remains strong then the digital currency could follow risk assets lower,” he added.
“Even if a proper sell-off does not materialise for stocks and other risk assets today, Bitcoin traders need to proceed with caution because in recent days we have been getting more and more signs that the appetite for risk is slowly fading away across the financial markets,” he added.
That said, U.S. equity markets were staging a remarkable rebound late Thursday, with the Dow Jones Industrial Average
up by about 200 points and the S&P 500
holding on to a 0.6% gain, after both indexes had been showing solid losses earlier in the session.