Dow Jones, a stock market index that indicates the value of 30 large publicly owned companies based in the United States has fallen below 23000 points for the first time since 2017 October and closed at 22859.60 points yesterday with the U.S. stock market crashing massively right before the yearend.
Market analysts are predicting that the stock market is approaching capitulation although the markets may not have entered a proper bearish period yet but seeing the top indexes such as Dow Jones and Nasdaq moving down rapidly, the bear market may not be too far.
Dow Jones had increased more than 25% in 2017 rising from below 19800 points to over 24700 points. According to analysts, a correction was surely due after a large bull run last year.`
The market downtrend in the U.S. markets has extended to all major industries with stocks of major tech companies such as Apple and Amazon falling more than 30% on an average and stocks of manufacturers such as Ford, Target and Tiffany falling between 30% to 35%.
Not only in the US, but markets in countries such as China, South Korea, and Australia are also falling rapidly leading to an increasing unemployment rate in South Korea and the commercial banks grappling in Australia. The SSE Composite has dropped more than 28% due to the trade wars between the United States and China. SSE Composite tracks all the stocks listed on the Shanghai Stock Exchange which is one of the two stock exchanges operating independently in the People’s Republic of China.
The Bitcoin market has been in a downtrend this year with the significant bearish fall down since November this year when bitcoin fell from around $6500 to the yearly low of $3250 in just around a month. Bitcoin price has been showing symptoms of recovery from Monday this week as the price started to increase gradually above $4000 which was a major relief for cryptocurrency investors and hodlers but today the price of bitcoin has again started to fall down below $4000 range which was a new support level for bitcoin. There is not a proper proof of bitcoin price and stock prices being correlated but we have surely seen both rising and falling side by side in the past. Last year, as the price of bitcoin went to an all-time high of $20,000, the prices of major stocks such as Dow Jones and Nasdaq also showed a massive increase. From the start of this year, the prices of bitcoin, as well as the prices of major stocks, have been on a downfall. Although Bitcoin has seen a more drastic downfall than stocks this year.
As bitcoin broke the critical support level around $4000 today, the new support level for bitcoin is now around $3800 and $3850. If this support is broken due to the selling pressure, then bitcoin may test the yearly low once again. Currently, Bitcoin is trading around $3962 according to Bittrex Chart (at the time of writing), with signs of further losses. Earlier, analysts were predicting that the lowest point for bitcoin has still not been achieved even as the price went to $3250. Analysts are predicting the lowest range to be around $2000 and $2500 before bitcoin can actually start to correct back and begin a bull run. The current major resistance lies around $4100 and $4150.
Disclaimer: The following article is not financial advice. The readers are advised to do thorough research and analysis before making any investment decisions in the stock market as well as in the cryptocurrency market which is quite volatile.
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