JP Morgan CEO Jamie Dimon predicts another easy 20% drop for the S&P 500 from current levels, considering the global macro economy. How will Bitcoin react?
In an interview with CNBC, Jamie Dimon said that the United States and the world are likely to enter a recession within six to nine months. He predicted that the S&P 500 could drop “another easy 20%” from current levels. He added that “the next 20% would be much more painful than the first.”
How accurate were Dimon’s earlier predictions?
The community believes that Jamie Dimon is known to predict Fear, Uncertainty and Doubt (FUD). is wrong in most predictions. In early April 2020, he predicted a bad recession in your annual letter to shareholders. They stopped the buyback of JP Morgan shares. The stock then rose 52% from April 2020 to April 2021.
In his April 2021 annual letter to shareholders, he said that “the pandemic will end with a rebound in the US economy, the US economy will likely prosper,” he added, “this boom could easily last until 2023”. The opposite happened. The current economy is in worse shape than it was in April 2021.
The markets will get the answer in 6-9 months if the index drops another 20%.
What does the graph say?
Is there any similarity between the 2008 chart of the S&P 500 and the 2022 chart? In 2008, when the index was down nearly 10% from its all-time highs, it retested the 200-day simple moving average (SMA). There was a head and shoulders formation, and the index broke the neckline in June 2008.
After that, the market saw a sharp drop of almost 50% before bottoming out.
Also in 2022, when the S&P 500 retested the 200-day SMA, it was down roughly 10-12% from its all-time highs. The index formed a similar head and shoulders pattern after receiving a rejection from the 200-day SMA. The neckline was broken in September 2022. Is the market on the verge of a strong move lower?
The impact on BTC
If Dimon’s prediction of another 20% drop turns out to be accurate, the community fears there will be an impact on cryptocurrencies. There is a high correlation between S&P 500 and BTC. The effect is multiplied when it comes to Bitcoin. From February to March 2020, when the S&P fell 35%, the price of Bitcoin fell by more than 60%. Currently, S&P is down nearly 25% from its ATHs and Bitcoin is down over 70%.
If the S&P 500 drops 20%, Bitcoin may see a drop of more than 50% from current levels. Some traders feel this could be a buying opportunity.
Is the CEO of JP Morgan in the money this time?
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