The Dow Jones closed down over 1,200 points today, building off of Friday’s plunge of 666 points! The relentless assault on of stock prices has suddenly jolted into reverse, delivering the biggest 2-day drop stocks we’ve seen in years.
But that’s nothing compared to the bloodletting we’re seeing in the cryptocurrency space. The price of Bitcoin just broke below $7,000, now nearly two-thirds lower from its $19,500 high reached in mid-December.
Even though stocks and cryptos are very different asset classes, the underlying force driving their prices down is the same – a change in sentiment.
- Dow Jones closed 1,200 points today
- Cryptocurrency however, are doubling down
- Can the anatomy of a bubble explain the phenomena?
In it, we examine the congregating perfect storm of crash triggers — rising interest rates, a fast-weakening dollar, a sudden return of volatility to the markets after a decade of absence, rising oil prices — and calculate whether the S&P’s sudden 6% rout is the start of a 2008-style market melt-down (or worse).
Make no mistake: these are sick, distorted, deformed and liquidity-addicted bubble markets. They’ve gotten entirely too dependent on continued largess from the central banks.
That is now ending.