U.S. equities markets jumped on Thursday as stock traders saw some relief after a number of weekly losses. All the major stock indexes rebounded after falling for nearly eight weeks in a row, while the crypto economy took some losses on Thursday, losing roughly 4% against the U.S. dollar during the past 24 hours. Meanwhile gold has been hanging below the $1,850 per ounce mark as Kitco’s Neils Christensen says gold markets remain “under pressure, seeing no major buying momentum.”
Analyst Says ‘Doom and Gloom’ Predictions ‘May Have Been Overdone’ Amid Stock Market Rebound
The Dow Jones Industrial Average, S&P 500, the Nasdaq, and NYSE composite all rallied during Thursday’s trading sessions. The S&P 500 rose about 2% reaching 4,057.84 by the closing bell, while Nasdaq spiked 2.7%, hitting 11,740.65.
Markets check: It’s a better day as stocks continued to rebound from the lowest levels in over a year.
The Dow Jones jumped around 1.6% on Thursday afternoon, as the index recorded gains for the fifth straight day in a row. Quincy Krosby, LPL Financial’s chief equity strategist, believes the rebound may be a sign that some of last week’s doom and gloom predictions were overhyped.
“Although this was an expected, and highly talked about potential ‘oversold’ rally, the underpinning for today’s market climb higher, suggests that last week’s doom and gloom about the all-important U.S. consumer may have been overdone, along with the dire recession headlines,” Krosby told CNBC’s Tanaya Macheel and Jesse Pound on Thursday.
Many Believe Cryptos Have Decoupled, Alex Krüger Says ‘Worst Case Scenario for Crypto Is Here’
Meanwhile, amid the equities rebound, the cryptocurrency economy faltered again on Thursday, losing 4% during the past 24 hours of trading. Bitcoin (BTC) lost a small percentage on Thursday dropping roughly 0.7%.
Ethereum (ETH), however, lost around 6.9%, alongside a number of alternative crypto assets that saw deeper losses than bitcoin. While stock markets have improved and crypto assets have not, a number of traders have been discussing crypto decoupling from stocks in terms of correlation.
The economist and trader Alex Krüger spoke about crypto decoupling from stocks on Thursday.
“Worst case scenario for crypto is here,” Krüger said. “Apathy and decoupling. The correlation with equities is now broken. It’s been largely gone since Monday afternoon. Now equities bounce alone.” After his statement, Krüger doubled down on his commentary. “Watch people who don’t trade and barely watch charts or correlations disagree with this tweet. It’s ok. Everybody copes differently,” Krüger added.
The bitcoin proponent Luke Martin, host of the Stacks podcast, also talked about digital currencies not bouncing back with equities markets.
“Seeing lots of tweets about stocks [and] crypto decoupling, and crypto not bouncing with stocks,” Martin tweeted. “Charting gives a better picture of what’s happening: 1/ We had high correlation 2/ Luna collapse leads to more severe crypto selloff 3/ Post collapse crypto not making up the difference.”
As Gold Markets Slump, Peter Schiff Discusses the US GDP Contraction and Bitcoin’s Decoupling
Gold has also not increased in value and remains under the $1,850 per ounce price range against the U.S. dollar. 30-day statistics show an ounce of fine gold is down 1.67% and 0.27% was lost during the past 24 hours. On Thursday, Kitco’s Neils Christensen discussed gold’s slump in a report that highlights the recent U.S. Commerce Department report that notes the first-quarter gross domestic product (GDP) declined at a 1.5% annual rate. “The gold market is not seeing much reaction to the disappointing economic data,” Christensen explained on Thursday.
Gold bug and economist Peter Schiff talked about the GDP shrinking 1.5% and also mentioned that bitcoin (BTC) has decoupled from Nasdaq. “The U.S. economy, supposedly the strongest it’s ever been, contracted by 1.5% in Q1, .2% more than analysts expected,” Schiff said on Thursday. “If [the] GDP contracts again in Q2, then the economy is officially in a recession. If GDP contracts when the economy is so [strong], imagine what happens when it’s weak,” the economist added.
Schiff continued on Thursday and made sure to throw salt on bitcoin’s recent market wounds. Schiff remarked:
Is bitcoin finally breaking free of its high correlation with the Nasdaq? While tech stocks are rising today Bitcoin is falling, almost breaking below $28K. My guess is that Bitcoin will continue to maintain its positive correlation with the Nasdaq, but only when it’s falling.
What do you think about the current state of markets and the economy? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin-Tidings.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin-Tidings.com News about the disruptive protocols emerging today.
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