[Bitcoin Now] Weakness as US Stock Market Falls... Synchronization Phenomenon

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] As the U.S. stock market closed lower, the price of the representative cryptocurrency Bitcoin showed weakness on the afternoon of the 1st. Previously, a decoupling was observed as Bitcoin moved in a different direction from the U.S. stock market, but on this day, a synchronization phenomenon was seen.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 2:08 PM on the day, the price of Bitcoin was recorded at $19,414 (approximately 27.98 million KRW), down 0.14% from the previous day.

Bitcoin prices declined following the U.S. stock market's lower close. On the 30th of last month (local time), the Nasdaq index, centered on technology stocks, closed down 161.89 points (1.51%) at 10,575.62. The Dow Jones Industrial Average fell 500.10 points (1.71%) to 28,725.51, and the large-cap S&P 500 index recorded 3,585.62, down 54.85 points (1.51%) from the previous session.

The U.S. stock market declined as the Federal Reserve (Fed)-preferred indicators exceeded expectations. According to the U.S. Department of Commerce, the core Personal Consumption Expenditures (PCE) price index for August rose 4.9% year-over-year. Month-over-month, it increased from 0.0% to 0.6%, intensifying inflationary pressure. Fed Vice Chair Lael Brainard emphasized the need to ease inflation and stated that the Fed is striving not to prematurely shift its current restrictive monetary policy.

Previously, despite the U.S. stock market declines on the previous day and the 27th, Bitcoin prices had risen. As the U.S. stock market fell consecutively, some analysts suggested that certain investors sought refuge in the cryptocurrency market. However, on this day, a synchronization phenomenon was observed.

Meanwhile, according to cryptocurrency data provider Alternative, the Fear & Greed Index, which represents investor sentiment as an index, dropped by 1 point from the previous day to 20 points (extreme fear). Alternative's Fear & Greed Index indicates that a score closer to 0 points reflects extreme fear and pessimism about investment, while a score near 100 points indicates optimism.