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Analysts are forecasting ongoing downward pressure for the SPDR S&P 500 ETF Trust (NYSE:SPY) and Bitcoin (CRYPTO: BTC), driven by technical indicators and macroeconomic trends.
What Happened: During a podcast on Thursday, noted analyst Benjamin Cowen cautioned that the S&P 500’s drop could continue into April, mirroring previous market downturns that affected both stock and cryptocurrency markets.
Although March has historically been a time when markets find a bottom during corrections, such as during the financial crisis and the pandemic crash, Cowen notes that downturns can sometimes carry on into April.
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A significant date to watch is mid-April, when the upcoming inflation report will be released. With new tariffs in play, investors are closely monitoring potential market responses.
Data from Glassnode indicates a death cross forming in Bitcoin’s on-chain metrics, with BTC’s 30-day volume-weighted price dipping below the 180-day average. Historically, such indicators have preceded 3 to 6 months of decline.
Why It Matters: Cowen highlighted an important metric for the S&P 500: the ratio of the S&P 500 to the money supply, which currently reflects levels similar to past significant market rejections, such as in 1998, during the financial crisis, at the pre-pandemic peak, and at resistance levels from 2021/2023.
The 1998 market rejection resulted in a decline of 20-23%. Cowen suggests that the current 10% drop may further extend to 20%, reflecting that historical pattern.
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He advises against panic, reminding investors that not every 20% drop leads to a recession. After the 1998 correction, the S&P 500 experienced a notable rally, suggesting a similar scenario could unfold in 2025.
What’s Next: Cowen recommends watching for a potential market bottom during the first or second week of April, with an 11-week correction possibly coinciding with the next FOMC meeting in May.
He also observes a potential death cross forming on the S&P 500, which has historically been trailed by a brief rally before any additional declines occur.
If this pattern persists, both Bitcoin and equities may experience a counter-trend bounce prior to the market’s next significant movement.
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