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- The CEO had earlier advised investors to prepare for an economic storm
- BTC Price at the time of writing – $19,105.43
- The S&P 500 is up for another leg down, according to the charts
Taking into account global macroeconomics, the correlation between BTC and the S&P 500 suggests that BTC can reach $10,000 levels if S&P falls by 20% from its current levels.What will happen to Bitcoin?
Jamie Dimon stated in an interview with CNBC that the United States and the world are likely to enter a recession within six to nine months. He said that the S&P 500 could fall “another easy 20% from where it is now. The next 20% would be much more painful than the first,” he continued.
How accurate were Dimon’s previous predictions?
The public is of the opinion that Jamie Dimon is reputed to be able to foretell Fear, Uncertainty, and Doubt (FUD). The majority of his predictions are incorrect. In his annual letter to shareholders earlier in April 2020, he had predicted a severe recession.
They stopped buying back shares of JP Morgan. The stock then rose 52 percent between April 2020 and April 2021. The pandemic will end with a US economy rebound, the US economy will likely boom, he added in his annual letter to shareholders in April 2021.
This boom could easily run into 2023. The opposite took place. The current state of the economy is worse than it was in April 2021. In six to nine months, the market will know whether the index will fall another 20%.
Are the S&P 500 charts from 2008 and 2022 comparable to one another? The index retested the 200-day Simple Moving Average (SMA) in 2008 when it was nearly 10% lower than its all-time highs. In June 2008, there was a head-and-shoulder formation and the index broke through the neckline.
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The impact on BTC
When the S&P 500 tested the 200-day SMA once more in 2022, it was approximately 10-12% lower than its all-time highs. After receiving a rejection from the 200-day SMA, the index formed a pattern that was similar to a head-and-shoulders pair. September 2022 saw a breach in the neckline.
The community is concerned that cryptos will be affected if Dimon’s prediction of another 20% decline proves to be true. There is a strong correlation between BTC and the S&P 500. When it comes to Bitcoin, the effect is multiplied.
Bitcoin’s price dropped by more than 60% during the 35% decline in S&P from February to March 2020.S&P is currently down nearly 25% from its ATHs, while Bitcoin is down more than 70%. If the S&P 500 falls 20%, Bitcoin could fall more than 50% from its current levels. Some traders think this could be a good time to buy.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
