Text size
Dreamstime
Bitcoin
finally broke below $29,000, a level that it’s been able to hold through 2022, and may be starting to break. That could be good news for the stock market—if it’s a sign of capitulation by investors.
Bitcoin has fallen 6% to $27,661.71, its lowest level since 2021. The cryptocurrency has been trading between $29,000 and $50,000 for much of the year. Stifel’s Barry Bannister sees it as the last speculative asset that needs to fall before the market can find a bottom.
“We monitor several factors which we believe will mark the capitulatory low for stocks,” he wrote. “One on that long list is Bitcoin, a high-powered speculative instrument, which we believe still has downside to about $15,000.”
While Bitcoin could lose half its value, the
S&P 500
probably has only 5% more to fall from Wednesday’s close, or about 3,700, Bannister said. With the S&P 500 down 0.8% early Thursday, that could mean stocks are getting closer to a bottom.
Just don’t tell Bitcoin investors that this is good news.
Write to Ben Levisohn at ben.levisohn@barrons.com