This Stock Market Indicator Is Sounding an Alarm Last Seen in 2021. It Signals a Big Move in 2024.
After a 202% gain over the previous 12 months, Bitcoin (CRYPTO: BTC) hit a record high of $73,098 on March 14. But during the seven weeks that followed, the cryptocurrency plunged by more than 20%, bottoming out at $58,298 on May 2, 2024.
That sharp decline suggests that investors are losing their appetite for risk, perhaps due to concerns about how sticky inflation and elevated interest rates will impact the economy. But whatever the reasons were behind this drop, there's a pattern that investors will want to be aware of: Any time during the past decade that Bitcoin has plunged by at least 20% from its peak, the S&P 500 (SNPINDEX: ^GSPC) has experienced a correction or bear market within the next 12 months.
Bitcoin hit record highs in 2014, 2017, and 2021, and declined by at least 20% following each of those events. Thereafter, the S&P 500 slipped into stock market correction territory or even bear market territory, often within a few weeks, but never more than 12 months later.
Source Fool.com
