The “Bank of America Securities” has recently published a series of 19 “bearish indicators” – signs that a bear market is imminent. A bear market is defined by a loss of value of more than 20%. Some believe that you can predict the price of Bitcoin with similar analyses before.
19 indicators for a bear trend
Of the 19 indicators, more than 60% were triggered – and the evidence suggests that the market could be at a turning point. These include triggers increases in the Federal Reserve interest rates or an inverted yield curve.
While the stock market stutters more, there are growing indications of an imminent bear market in the stock. Thus, investors who purchase a Treasury bill with a ten-year term receive lower returns than a three-month exchange. Often referred to as “reverse curve” refers to, indicates this activity is a dangerous bear market.
Other indicators seem to go in the same direction. For example, stocks that exceed earnings expectations get low yields. This is often a sign of an overbought market that is directed downward.
These indicators have triggered in more than 80% of the cases since 1968 in a bear market. The latest decline was the end of 2018, 80% of the indicators were selected – however, there is no bear market occurred.
Bitcoin knows no bear market
Although Bitcoin has never experienced a real bear market, suggests to some that the price is through the observation of stock can be predicted. These Economists believe that the shares and Bitcoin are inversely proportional. This means that If one increases, decreases the other.
This relationship is based on the Belief that Bitcoin acts largely as a “safe haven”. The global markets move as a result of the government policy in the negative range.
Since it is decoupled from the policy, flows to the investors in droves, in order to protect the value. Precious metals work in the same way.
For this reason, investors should expect a rise in Bitcoin, if the stock market is in bear-moved to the territory. Should the shares of its bull market, however, continue to, could it be that Bitcoin is recorded for some time, there is no strong profits.
Example for the phenomenon: As the Coronavirus-news, the shares in the negative, sent, increased by Bitcoin. This suggests that investors do not view the Coin as the markets are decoupled and an investment to be ready for when the other option close window.
Because Bitcoin investors, however, have never experienced really a real downturn in the market, the future is unclear.