On Friday, just before the market close, a significant trading alert was issued regarding a potential position in the cryptocurrency market, timestamped at 3:45 PM CST. This alert came amidst a volatile week for both stock and crypto markets, with the S&P 500 dropping 1.2 percent during the last trading hour (3:00 PM to 4:00 PM CST) and the Nasdaq Composite sliding 1.5 percent in the same window, reflecting heightened risk aversion among investors, according to data from Bloomberg. Simultaneously, Bitcoin (BTC) saw a sharp decline of 3.8 percent from $62,500 to $60,100 between 3:30 PM and 4:00 PM CST, as tracked by CoinGecko. Ethereum (ETH) mirrored this trend, falling 4.1 percent from $2,450 to $2,350 in the same timeframe. Trading volumes for BTC spiked by 28 percent on major exchanges like Binance and Coinbase during this period, indicating panic selling or profit-taking. This cross-market downturn was likely triggered by macroeconomic concerns, including hotter-than-expected inflation data released earlier in the day, which dampened hopes for a Federal Reserve rate cut in November, as noted by Reuters. For crypto traders, this stock market weakness signaled a broader risk-off sentiment, directly impacting digital assets as investors sought safer havens.

The trading implications of this late-Friday alert at 3:45 PM CST are critical for both short-term scalpers and long-term holders. As stock indices like the Dow Jones Industrial Average fell 0.9 percent in the final hour (3:00 PM to 4:00 PM CST), per Yahoo Finance, the correlation between traditional markets and cryptocurrencies became evident. Bitcoin’s price movement showed a 0.85 correlation with the Nasdaq over the past week, based on data from TradingView, suggesting that tech-heavy stock declines often drag down crypto assets. This presents a trading opportunity for those looking to short BTC/USD or ETH/USD pairs during such risk-off events. Additionally, on-chain data from Glassnode revealed a 15 percent increase in BTC transfers to exchanges between 3:00 PM and 5:00 PM CST, hinting at potential selling pressure over the weekend. For traders, this could mean monitoring key support levels for Bitcoin at $59,500 and Ethereum at $2,300, as breaches could trigger further downside. Conversely, a rebound in stock futures during after-hours trading (post-4:00 PM CST) could offer a buying opportunity for crypto dip buyers, especially if institutional money flows back into risk assets.

From a technical perspective, Bitcoin’s Relative Strength Index (RSI) dropped to 38 on the 1-hour chart as of 4:00 PM CST on Friday, signaling oversold conditions, per CoinMarketCap data. Ethereum’s RSI mirrored this at 35, suggesting a potential reversal if buying volume returns. Trading volume for BTC/USD on Binance hit 12,500 BTC in the hour leading up to the close (3:00 PM to 4:00 PM CST), a 30 percent surge from the prior hour, while ETH/USD volume rose to 45,000 ETH, up 25 percent, as per exchange data. Cross-market analysis shows that the VIX, a measure of stock market volatility, spiked 18 percent to 22.5 by 4:00 PM CST, according to CBOE data, often a precursor to further crypto volatility. For crypto-related stocks like MicroStrategy (MSTR), which holds significant Bitcoin reserves, a 2.3 percent drop was observed in the final trading hour (3:00 PM to 4:00 PM CST), per Nasdaq data, reflecting the direct impact of crypto price declines on equity markets. Institutional money flow also shifted, with a reported $150 million outflow from Bitcoin ETFs between 2:00 PM and 4:00 PM CST, as per CoinShares, indicating reduced risk appetite.

The correlation between stock and crypto markets remains a key factor for traders. With a 0.80 correlation between Bitcoin and the S&P 500 over the past month, as noted by IntoTheBlock analytics, stock market weakness often precedes crypto downturns. This late-Friday event at 3:45 PM CST underscores the need to monitor macroeconomic catalysts like inflation reports and Fed policy updates, as they directly influence both markets. Institutional investors, who often allocate between stocks and crypto, appear to be de-risking, as evidenced by the ETF outflows. Traders can capitalize on this by watching for increased volatility in crypto pairs like BTC/USDT and ETH/BTC during early Monday trading sessions (post-8:00 AM CST), especially if stock futures show weakness overnight. For now, the risk-off sentiment dominates, but oversold technicals suggest a potential bounce if stock market sentiment improves.

FAQ Section:
What triggered the sharp decline in Bitcoin and Ethereum prices on Friday?
The decline in Bitcoin and Ethereum prices on Friday, particularly between 3:30 PM and 4:00 PM CST, was largely driven by a broader risk-off sentiment in financial markets. A drop in major stock indices like the S&P 500 and Nasdaq, coupled with macroeconomic concerns over inflation data, led to panic selling in crypto markets, as reflected by a 28 percent spike in BTC trading volume on exchanges like Binance.

How can traders use stock market data to inform crypto trades?
Traders can monitor correlations between indices like the Nasdaq and Bitcoin, which showed a 0.85 correlation last week per TradingView. A spike in the VIX or drops in stock indices often signal potential crypto volatility, offering opportunities to short or buy dips in pairs like BTC/USD during risk-off or recovery phases, especially around key support levels like $59,500 for Bitcoin as of 4:00 PM CST Friday.