In recent weeks there have been some problematic signs in certain markets and this has significantly increased the risk of a downturn in the stock markets as well. Whether this decline will be smooth or less smooth will be seen from how the factors that significantly affect sentiment in the markets, develop.

Recently, stocks that had recorded significant gains from the March 2020 lows have already made a significant correction. The main reason that led to this strong correction of these stocks was that many of these companies failed to maintain the strong rate of profit and acquisition of new customers, as a result of which investors withdrew their funds and further strengthened their positions in value shares.

Coinbase's entry into the stock market is certainly a crucial moment for the future of blockchain, but the sharp turn of small investors in it was another sign of a possible vanity that companies can only go up. In fact, many of the investors sold positions in companies such as MicroStrategy, Tesla and other companies that are somehow related to bitcoin, creating a general turmoil in the markets, which, however, has not reached a dangerous extent.
In addition, the reversal of the strong upward momentum of the markets created significant problems for small investors, who in search of fast and big profits were driven to cryptocurrency markets, many of which achieved deafening returns in a few days. This was a strong indication of an unwarranted rage, which has already resulted in a reset of more than $ 11 billion in assets.

This is where the potential problem of the markets derives from. Given that the debate over bitcoin and its regulatory and fiscal future has already begun, we need to see if the pressures can be intense. This is because there are listed companies and many funds, which have exposure to bitcoin and their behavior is significantly affected by the movements of cryptocurrency.

Bitcoin has already been found 24% lower (23/04 11:45) and this is a level of losses that seems perfectly reasonable for bitcoin volatility data. If the cryptocurrency manages to maintain its losses at levels up to -30%, it is quite possible that it will not create turmoil in the markets, which will try to hold on to other causes. If the situation gets out of control, however, the markets could be hit by a deteriorating investment sentiment and the rational search for more defensive options.