Bitcoin Drops 3% Amid Stock Market Crash Fears
1min read Bitcoin (BTC) experienced significant volatility leading up to the April 6 weekly close, as concerns about a potential stock market crash intensified. Data indicated that BTC/USD dropped below $80,000, marking a 3% decrease from the start of the week. This volatility was fueled by US trade tariffs and recession fears, which led to substantial losses across various risk assets.
US stocks, in particular, faced significant declines. Both the S&P 500 and Nasdaq Composite Index ended the April 4 trading session down nearly 6%. The magnitude of these losses prompted comparisons to the historic "Black Monday" crash of 1987. Financial commentator Holger Zschaepitz highlighted the severity of the situation, noting that the recent tariff announcement had wiped out $8.2 trillion in stock market value, surpassing the losses seen during the worst week of the 2008 financial crisis.
Jim Cramer, host of a popular financial segment, expressed caution, stating that the scenario of a 1987-style crash was still a possibility. He warned that the current market conditions were reminiscent of the 1987 crash, where market circuit breakers could potentially slow down the decline. However, he also acknowledged that those who attempted to bottom-fish during this period were facing significant risks.
In the Bitcoin community, opinions were divided. Max Keiser, a well-known Bitcoin supporter, predicted that a 1987-style crash could drive BTC/USD to $220,000 by the end of the month, as investors sought safe havens for their wealth. This prediction was met with skepticism by some traders, who argued that Bitcoin had already weathered the initial shock of the tariff announcement and could see further price increases in the coming days.
Traders noted the diverging sentiment between Bitcoin and traditional stocks. Daan Crypto Trades observed that while Bitcoin's volatility was decreasing, the Volatility Index (VIX) for stocks had reached its highest level since the Covid crash in 2020. This compression suggested that a significant move in the crypto market was imminent, with the direction depending on whether stocks could find a bottom early in the week.
Cas Abbe, another trader, suggested that the recent lows of $76,000 on BTC/USD could be a classic fake breakdown, similar to previous market dumps. He predicted that a weekly reclaim of $92,000 would confirm the uptrend, indicating that Bitcoin could still see substantial gains despite the current market turmoil.
