Bitcoin is having a relief rally as it has managed to recover negative gains with a correlation level with Nasdaq 100.
Bitcoin (BTC), the world’s largest cryptocurrency, is up 5% in a weekend rally that has taken it past $30,000 levels. Bitcoin continued to fall last week, with a significant lagging from the tech stock and the Nasdaq-100.
Bitcoin appears to be attempting to make up for lost ground with the Sunday gains. BTC has recovered from its recent losses and is currently trading at flat levels on the weekly chart. The Nasdaq 100, on the other hand, finished the week up nearly 7%.
Lark Davis, a cryptocurrency analyst, believes that a relief rally is likely. He also explains Bitcoin’s relationship with the Dollar Index.
The bigger question now is whether Bitcoin can sustain its recent price increase. Antoni Trenchev, co-founder and managing partner of cryptocurrency lender Nexo, believes the coin is on its way to new lows. Trenchev explained to Bloomberg:
“This is the type of de-correlation nobody wanted. Bitcoin has yet to test its sub-$26,000 May 12 lows. One senses it’s only a matter of time, given Bitcoin’s failure to mirror the Nasdaq’s gains in the past week.”
Mark Newton, Fundstrat’s head of technical strategy, wrote to clients, “One final pullback to test May 12 lows near $25,401 still looks more likely before any meaningful low is in place.”
Bitcoin, like stocks, experienced a significant price correction in May. However, while stocks have begun to recover, Bitcoin and the broader crypto space have continued to fall. When it comes to the overall performance of the crypto market, Bitcoin has been relatively stable, while altcoins have been crashing like there’s no tomorrow.
The weight of global macros will continue to have an impact on crypto in the future. The Fed will continue to raise interest rates until US inflation returns to normal.
