Despite Sharp Declines in U.S. Stock Markets, Bitcoin Continues to Show Resilience

• With a Wednesday drop of 1.3% for the S&P 500 and 1.87% for the Nasdaq, Bitcoin is holding strong at the $27,000 resistance level.
• High inflation has pressured the Federal Reserve to raise interest rates to the detriment of the economy, and Federal Reserve Chair Powell has stated that at least one interest rate hike is possible by the end of the year.
• Bitcoin continues to perform strongly despite challenging times in traditional markets, something it hasn’t done in a while.

US stock markets experienced a sharp decline on October 3, but the Bitcoin price continued to hold on: Things are mixed in the US!

Sharp Declines in U.S. Stock Markets on October 3

With a Wednesday drop of 1.3% for the S&P 500 and 1.87% for the Nasdaq, Bitcoin is holding strong at the $27,000 resistance level. The U.S. government and economy are still grappling with the money spent on the COVID crisis. Subsequent high inflation has pressured the Federal Reserve to raise interest rates to the detriment of the economy, and Federal Reserve Chair Powell has stated that at least one interest rate hike is possible by the end of the year.

To add to this, the U.S. Treasury plans to borrow $1.85 trillion in the second half of this year just to fill its own coffers. According to COINOTAG, aside from concerns at the Fed and in the U.S. market, the repercussions of money printing are most acutely felt in Europe and emerging markets. Dario Perkins, Global Macro Research Chief at TS Lombard, said in a note to clients quoted by COINOTAG:

“While the Fed has been tightening and trying to protect their currency, some central banks – particularly in Europe – have been forced to hike interest rates aggressively.”

Dario Perkins continued:

“Post-COVID, the U.S. party has become, as another piece of American exceptionalism, the residue of Europe.”

Bitcoin Still Holding Up Well

Meanwhile, Bitcoin is continuing to perform strongly despite challenging times in traditional markets, something it hasn’t done in a while. The king of cryptocurrencies, however, is still battling above the $27,000 resistance level. If it fails to break through these two barriers, which are below the 200-week moving average, it could extend the first phase of the Bitcoin bull market.

On the positive side, China is injecting ample liquidity into its markets to support its economy, and the U.S. may be just a step away from firing up its own money-printing machine.

Since the SEC is currently obstructed in almost all areas of the crypto space, Bitcoin could break free from regulatory constraints and continue to thrive.