Crypto market's advances could be short-lived due to the stock sell-off spillover, according to the expert trader Gareth Soloway.
Despite the cryptocurrency market trading back in the green; its advances could prove short-lived due to the negative influence from the stock sell-off spilling over, according to the Chief Market Strategist at InTheMoneyStocks.com, Gareth Soloway.
Specifically, Soloway believes that the stock market is in for a sell-off and that this situation could have wide-reaching consequences, including in the crypto sector, as he told Stansberry Research’s Daniela Cambone in an interview streamed on April 5.
Panic selling
In his view, although the recent bank runs have allowed cryptocurrencies, particularly Bitcoin (BTC), and precious metals like gold to stand out as alternatives outside the banking system, as he had noted that this was exactly why Bitcoin came into being, this situation still didn’t trump fear and emotion.
According to the trading expert, people in panic “don’t ask questions, they sell,” and such a period, as the one witnessed during the beginning of the Covid pandemic in March 2020, could be in store in the near future:
“I think that’s what we’re coming into. We’re coming into a period in the equity markets where I think you’re going to get a realization there’s a recession. (…) You’re going to get this sell-off in the stock market. My guess is it bleeds into crypto, and it creates more selling in crypto to the downside.”
Bull or bear market?
On top of that, Soloway said he was still unsure about whether or not the bull market is back on with Bitcoin as it keeps having trouble breaking the $30,000 level, referring to it as the “line in the sand” and still hanging on the possibility of the flagship decentralized finance (DeFi) asset dropping to $12,000-$13,000 by before any major rally.
However, his belief is that if Bitcoin does get above $30,000 and “we stay there for, let’s say, a week or so, and establish ourselves back above that level, I think at that point then I’ll say, ‘Okay, listen, we’re back above the psychological lows from the bull market of 2021 – now I think the low is in,’ but as of now, to me, this is a run-of-your-mill bear market rally.”
Meanwhile, the crypto sector’s representative is trading at the price of $28,553, up 0.82% on the day, as well as gaining 4.62% across the week and 27.35% in the last 30 days, according to the Finbold data on April 5. At the same time, CoinMarketCap information indicates that the total crypto market capitalization has climbed 1.08% in the last 24 hours, currently standing at $1.2 trillion.
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