There’s a correlation between macroeconomic factors and crypto assets like Bitcoin. Negative factors such as stricter and more severe economic conditions can increase volatility in virtual tokens. The same holds true for equity stock markets and the markets.
Over the past week, there has been a downward trend in primary cryptocurrency. Bitcoin was seen moving towards $19,000 without anchor. With the US Federal Reserve’s new rate hike, the crypto market saw a dramatic south move. The trend was also evident in the equity markets.
Diverse Trends for Crypto and Equity Markets
However, this week’s trend is different between crypto and equity markets. Wall Street was able to correct most stocks by launching a correction mode. The 3 most important US indices suffered a sudden collapse, with a correction of 1% on Monday September 26.
Equities and commodities fell by more than 10%. However, the MVIS CryptoCompare Digital Assets 100 Index dropped by 1% in the past month.
The price drops in equity markets since the start of this week were not enough to stop Bitcoin and other cryptocurrency cryptocurrencies from rising. However, the bullish trend has continued despite every odds. As Wall Street’s correlation failed, this created an unexpected surprise for both inside and outside of the market.
BTC’s price soared to $20,000 BTC’s price reached $19K after the week-long struggle. Analysts expected Bitcoin to slowly fall below $17,500 in 2022. With its reclaims, the token managed to make an important move in cryptospace.
BTC traded at around $19 and114 during the time this article was written. That indicates that there has been a decline in miner activity. Its current market capitalization stands at $387.5 billion. Due to the dramatic rise of Bitcoin’s price, there have been over 14 million liquidations of short positions.
OnChainCollege reportedThe Bitcoin Mayer Multiple, while Citing Glassnode Data. This report noted that multiple stalls have fallen to a historic low. It also compared Bitcoin to its 200-day moving median, which shows how undervalued it is.
A price rise is being experienced in the wider crypto market. Altcoins like Ethereum (ETH), Avalanche(AVAX) and Solana (+SOL), all saw a price rise of over 6%. This new bullish trend for BTC and other crypto assets indicated the crypto market’s resilience to volatility, unlike traditional stock.
Bitcoin and Equity Stocks Could Have a Breakup
In comparison to the US equity market, this year’s primary cryptocurrency had a greater correlation. Bitcoin’s price trend was similar to that of the S&P 500. However, BTC’s new price spike is breaking the link, though it’s only time that will tell.
Also, there’s a concern with the drop in the Bitcoin whale holdings this year. However, some analysts are neutral despite the uncertainties of the world’s macros.
Katie Stockton was the founder and CEO of fairlead Strateies LLC. She stated that Monday’s BTC rebound can be used for short-term measures. Most people will likely remain neutral, as they anticipate a rapid failure of the bounce.
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