The key to the stock market rebounding next week may lie with how well bitcoin performs over the weekend, according to technical analyst Katie Stockton. “Bitcoin has been a bit of a leading indicator of risk appetite. If we see bitcoin bottom, it would be a short-term positive for equities,” Stockton, founder of Fairlead Strategies, told CNBC’s “Squawk Box” in an interview on Friday. “If it doesn’t, that’s even worse.” Stocks don’t trade on weekends, but bitcoin trades 24/7 and a crypto stabilization over the weekend may signal the risk-off attitude currently gripping financial markets is easing. BTC.CM= 1M bar Bitcoin 1-month chart Bitcoin got crushed this week, dropping 11%. The crypto was off its lows early Friday but still in a downtrend. The move this week appeared to lead equities lower as well, as many investors who own bitcoin are also holders of artificial intelligence stocks . The S & P 500 is down more than 2% week to date through Thursday’s close. Nvidia, which reported a monster quarter and much better-than-expected guidance earlier in the week, is down 5%. .SPX NVDA 5D mountain SPX and NVDA this week To be sure, Stockton noted that the week of Thanksgiving is usually a strong period for stocks, adding that “we do have short-term oversold conditions” — which suggest a small rebound may be in store for stocks anyway. Still, bitcoin appears to hold the key for stocks heading into next week, Stockton added. “What we’d like to see from bitcoin is for it to come back above the low $90,000s threshold. That would preserve support and also suggest that this down move is climactic,” she said. Bitcoin traded around $84,000 on Friday and hit its lowest level since April 11, when it traded as low as $78,926.67.
