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Goldman Sachs warned that another leg down in US equities could trigger large, rules-based selling that may also pressure Bitcoin and major cryptocurrencies.
The bank’s trading desk told clients that high stress and thin liquidity could keep volatility elevated, even after a late-week rebound in stocks.
Goldman said trend-following Commodity Trading Advisers (CTAs) already crossed a short-term selling trigger in the S&P 500. These systematic funds adjust exposure from price trends, not company fundamentals. That setup can create selling that feeds on itself when markets weaken.
Goldman estimated CTAs could sell about $33 billion of US equities this week if weakness returns. Over the next month, the bank’s models showed up to $80 billion in additional selling if the drawdown deepens. Goldman tied the larger figure to a drop below a key index level near 6,707 on the S&P 500.
Goldman also pointed to fragile market depth. When liquidity runs thin, smaller orders can move prices more than usual. That dynamic can widen intraday swings and raise the risk of abrupt reversals.
The desk also flagged options positioning that shifted toward short gamma for dealers. In that regime, hedging activity can intensify moves. Dealers may need to buy as prices rise and sell as rates fall to stay hedged. That flow can add momentum to rallies and deepen declines.
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Goldman’s note focused on equities, but the bank said stock volatility often spills into crypto markets. Traders frequently treat Bitcoin and large altcoins as higher-risk assets during macro stress. That pattern can drive selling through deleveraging, tighter risk limits, and reduced appetite for speculative Bitcoin exposure.
The warning also reopened the Bitcoin-versus-gold discussion. Cathie Wood, who leads ARK Invest, said she would favor Bitcoin over gold in the current environment. She argued that conditions that typically power a major gold surge do not look present now.
Separately, JPMorgan Chase & Co. has pointed to shifting relative dynamics between the two assets, including a lower Bitcoin-to-gold volatility relationship in recent analysis.
