After staging a solid and steady recovery since late March, the stock market has suddenly taken an extremely bearish turn with the Dow Jones Industrial Average (DJIA) declining 1,860 points on June 11. This is equivalent to 2-3 weeks of the stock market’s recovery being erased in 7 hours.
Simultaneously, Bitcoin (BTC) sharply dropped as well from near $10,000 to $9,200. This is surprising considering that Bitcoin (BTC) is a logical safe haven asset, i.e. when stocks are melting down it would be expected that investors would put their funds in Bitcoin (BTC) as a safe haven.
As explained in a previous article on Crypto.IQ, the University of Sussex exposed a global market manipulation scheme which had the goal of devaluing safe haven assets around the time that the stock market crashed in March.
Basically, stocks were melting down in March, and this would have naturally led to investors converting their funds into safe haven assets like gold and Bitcoin (BTC). The people behind the market manipulation wanted to protect the value of their USD denominated assets, like stocks and equities, so they attacked and devalued the price of safe haven assets in order to force other investors to keep their USD denominated assets rather than rushing into safe havens.
If this theory is accurate, then it is possible that the same sort of global market manipulation attack on safe haven assets happened on June 11. Aside from Bitcoin (BTC) suddenly dropping $800, the price of gold failed to increase as well, even though gold should have seen a steady rally.
On the other hand, it is perhaps possible that there is no global market manipulation against safe haven assets, and that stock crashes naturally cause Bitcoin (BTC) to drop as well. One possible explanation is that if the stock market crashes really quick, some whale investors may be forced to sell their Bitcoin (BTC) in order to cover their losses on the stock market.
Ultimately, there is no way to know for sure if the Bitcoin (BTC) market behavior on June 11 was natural or the result of market manipulation. Regardless, it is becoming clear that Bitcoin (BTC) is likely to drop significantly on days when stocks crash hard.