Bitcoin price prediction after Morgan Stanley stock warning
US stocks and cryptocurrency prices have been under pressure in recent days as investors weigh the ongoing earnings season and the actions of the Federal Reserve. Ethereum and Bitcoin prices have moved into a correction phase while the Dow Jones and Nasdaq 100 indices have stalled.
Morgan Stanley stock warning
In a note to investors, Morgan Stanley’s Mike Wilson warned that shares could fall in the coming months as corporate profits fall. He cited the fact that revenue growth has fallen sharply in recent months as companies deal with margin compression.
Therefore, he believes that key stock indices such as the Dow Jones, Nasdaq 100 and S&P 500 may slide by double digits in the coming months. He said:
Mike Wilson’s statement was important because of his role in the financial industry. In 2022, he was named the number one Wall Street analyst, according to a survey by Institutional Investor. He accurately predicted the selloff in stocks as the Dow Jones and Nasdaq 100 fell by more than 10%.
Earnings have fallen sharply in recent months. Data from Factset shows that the company’s revenues have fallen at the fastest pace since the Covid-019 pandemic. This week, some of the biggest players in corporate America such as Microsoft, Alphabet, Amazon and Meta Platforms will publish their financial results.
Read more: How to trade Bitcoin.
Impact on Bitcoin Prices
The warning from Morgan Stanley could have an impact on Bitcoin and crypto prices. While cryptocurrencies do not have earnings, there is usually a close relationship between stocks and digital coins.
For example, stock indexes such as the Dow Jones rose to record highs as Bitcoin also traded at its all-time high. Similarly, while Bitcoin’s crash was also deeper in 2022, it also coincided with a period when US indices fell.
The next catalyst for Bitcoin, stocks and other cryptocurrencies will be the upcoming economic data from the US. These figures include consumer confidence, new house prices, GDP and the personal consumption expenditure index (PCE). They are important because they will influence the next Federal Reserve decision.
Analysts expect the Fed to raise interest rates by 0.25% in May and then keep them unchanged for some time. Despite the earnings of Morgan Stanley, I suspect Bitcoin prices will bounce back in the coming weeks and retest the key resistance at $35,000.
