Bitcoin Price Rallied as Apple Flashed ‘Death Cross’
Apple Inc.’s stock flashed a bearish “death cross” for the first time in three years — suggesting that a major selloff could be around the corner. Meanwhile, the bitcoin price climbed more than 10% on December 20 ahead of a possible “Santa rally,” as Coinbase president Asiff Hirji suggested.
The comparison is apt because the cryptocurrency market and tech stocks tend to move in tandem. In fact, the recent downturn in the tech sector was partially blamed for the bitcoin bear market.
“As growth stocks, tech, and FAANG come under pressure, it’s going to hurt bitcoin,” Fundstrat co-founder Tom Lee said in November. “The downturn in FAANG is hurting those owning bitcoin.”
Today, Apple stock plunged to a 10-month low amid reports that a German court had ordered it to stop selling some of its older iPhones because they infringed a Qualcomm patent, MarketWatch reported.
Adding to Apple’s woes was a new projection by Rosenblatt Securities that Apple may slash “another 4 million iPhones” from its production plans due to slowing demand.
Bitcoin Outperformed Apple During Bear Market
Apple has now became the fifth and final FAANG stock to produce a death cross, which is a chart pattern indicating that a major selloff looms on the horizon. FAANG is an acronym for the five best-performing tech stocks in the stock market: Facebook, Apple, Amazon, Netflix and Alphabet’s Google.
The death cross — which is considered a fairly accurate predictor of bear markets — appears when a stock’s short-term moving average crosses below its long-term moving average.
By all accounts, the bearish FAANG performance should spell near-term doom for the crypto market, but will it? Maybe not, if the past few months are any indicator.
Despite the crypto bear market, bitcoin has outperformed Apple since January 2018, even though Apple and the tech sector hit record highs during an unprecedented bull run in the US stock market.
If this is how bitcoin performs during a down market, what’s going to happen when the bulls take over — as many market insiders predict will happen in 2019?
Jeremy Allaire, the co-founder and CEO of Circle, says bitcoin will surge over the next three years as institutional investors hop aboard the crypto bandwagon and mainstream adoption grows.
Regardless of its daily price movements, Allaire said bitcoin has a “very significant role” to play as a scarce, non-sovereign store of value.
Moreover, Allaire says the tokenization of financial assets is a growing trend that will gain traction in the near future — and that will ensure that crypto survives and thrives.
“We have a phrase: the Tokenization of Everything,” he said. “We think cryptographic tokens are going to represent every form of financial asset in the world. There will be millions of them in years.”
Featured image from Shutterstock.
