Fairlead Strategies founder Katie Stockton says the US stock market is now strongly tied to how Bitcoin behaves this weekend. She told CNBC that Bitcoin often moves before stocks do, so its weekend trend could hint at what comes next for markets.
This morning Bitcoin fell below $81,000. The drop came because investors are worried about the global economy. When Bitcoin slid, the S&P 500 also fell. Nvidia even dipped below its 100-day average even though it recently posted amazing earnings and gave strong guidance.
Stockton explained that Bitcoin has become an early sign of how much risk investors want to take. If Bitcoin shows signs of forming a bottom this weekend, she says it could help stocks bounce in the short term. Many people who invest in crypto also invest in tech and AI companies. When Bitcoin weakens, it often shows that investors are losing confidence in riskier assets and that feeling spills into the stock market.
She also said that if Bitcoin can jump back above $90,000, it would suggest that the recent sell off is more of a final shakeout rather than the start of a bigger downtrend.
There are other things that could help stocks next week too. A US Federal Reserve official recently said that a rate cut in December is still possible. That comment brought back hopes that borrowing costs could drop sooner than expected. Lower rates usually help companies and encourage investors to take more risks, especially in areas that have been hit hard by rising yields.
Stocks also usually do a bit better around Thanksgiving. Stockton pointed out that the market is already in a short term oversold position. In the past, this kind of setup has often been followed by a rebound. So if Bitcoin holds steady and optimism around the Fed grows, stocks could find some support going into the holiday week.
Overall, this weekend could be very important for both crypto and stocks. If Bitcoin can hold key levels, it might show that confidence is returning. That could help spark a small recovery in the stock market as we head into a season that is usually stronger for equities.
