Over the past few weeks, both the S&P 500 and the crypto markets have been showing signs of recovery. Yet, with the worst of the COVID-19 crisis still to come and a deepening global recession, macro factors show that the bottom may not yet be in.
Crypto Bottom Could Still Be to Come
The cryptocurrency markets have been battered by the coronavirus pandemic as economies around the world shutter to a halt taking investor confidence with them. Many argue that this is the “perfect storm” for Bitcoin. The number-one crypto has often proved itself as a viable option in terms of global unrest. Crypto markets tend to pump upon global geopolitical factors such as trade wars or tensions in the Middle East.
But this time around, the fall-out from the pandemic is going to be epic on a global scale. The IMF foresees the worst recession since the Great Depression. Countries in Europe are preparing to brace for the worst crisis since the wartime years. And the U.S. has already lost 25 million jobs in four weeks:
A decade of job gains undone in just four weeks

Added to that, Bitcoin’s correlation to the stock market has hit an all-time high. This cancels out (temporarily at least) the idea that it has reached safe-haven asset status just yet.
It’s also not a good thing for crypto if this correlation continues since many analysts predict that the stock market bottom is nowhere near in yet–and investors should brace for massive hits. As and when this happens, it won’t be bullish for crypto, in the short-term at least as investors seek liquidity.
CME Gap Could Trigger Correction
In addition to the global macro factors looking gloomy for all markets, Bitcoinist reported yesterday:
The Bitcoin price has a CME gap at $3,500, and given the historical tendency of BTC to close it, there exists a possibility that the dominant cryptocurrency may retest the $3,000 region.
A CME gap alone is not enough to trigger a price correction. But with the outlook so grim in the near-term as more lives and jobs are lost globally, the crypto bottom may not be in just yet.