There is uncertainty about whether a new bear market has already started in the price of bitcoin

if the recent visits to the $25,000 area this week is nothing more than a correction, within a macro uptrend.

To try to glimpse where the price of the digital currency is heading in the short and medium term, seeing what is happening with the US market and its stock market indices may be a good option.

The reason is that in the week ending today, the correlation between the price of bitcoin and the US stock indices, S&P500 and Nasdaq, reached a new all-time high.

The reason seems to be that many big-cap investors see BTC as just another risky asset. The cryptoanarchist ideals with which Bitcoin was conceived, or the technological developments around that digital currency, are for them something secondary, if not irrelevant. The possibility of speculating on its price is what moves them to make purchase or sale decisions.

Thus, little by little, over the years, the price of Satoshi Nakamoto's cryptocurrency danced more and more to the rhythm of the world economy (which is led by the US). Recent price movements, both for bitcoin and for the S&P500 and the Nasdaq, prove this.

As seen in the chart above, that trend seemed to be doubtful until the beginning of 2020. Bitcoin was emerging as an ideal “counterinvestment” to keep its faithful covered against the risk of the fiat system and the “black swans” of the traditional stock markets. .

But, since the fall of the markets due to the COVID-19 crisis, in March 2020, it was seen that neither BTC nor other crypto assets remained safe. Since then, with a few exceptions, the correlation between BTC and the US economy has only increased.

Regarding the correlation with the Nasdaq, a US stock exchange that brings together technology companies, Mike Boroughs, founder of the Fortis Digital investment fund, said when asked by the press: “Five years ago, the people who were in cryptocurrencies were people in cryptocurrencies. . Now you have guys that are across the spectrum of risky assets. So when they get hit there, that affects their psychology."

Taking into account the aforementioned correlation between BTC and S&P500 shares, it will be useful to know what projections there are for the United States economy in the short and medium term, to see where the price of the digital currency could go.

The US 500 Stocks Index hit a 3-month low this week. The reason seems to be the existing concern about the measures that the Federal Reserve (Fed) will take to tame inflation.

Kristina Hooper, Chief Global Markets Strategist at Invesco, is convinced that "markets are leading the way to the start of a return to a more normal monetary policy environment." The rise in interest rates is one of the US government's tools to try to control inflation and the latest Fed measures have gone in that direction.

Publicar un comentario

0 Comentarios