Bitcoin and the broader crypto market have trended lower this week and now for the fifth day in a row. The price of BTC has fallen by 3% in the past 24 hours and is currently trading at $22,785 with a market capitalization of $435 billion.
The focus is now on its 200-week moving average (WMA), as Bitcoin is trading near $23,000. In a note to investors on Thursday, Craig Erlam, senior market analyst at Oanda, wrote:
“The rally that took it down to $25,000 has lost considerable momentum and that could start to weigh more heavily on the price” of Bitcoin. “A move below $22,500 may suggest the rally has run its course for now.”
On the other hand, crypto market analyst Lark Davis also points out that Bitcoin has been losing “RSI uptrend, bearish MACD cross, losing 50-day EMA right now,” over the past 24 hours.
— Lark Davis (@TheCryptoLark) August 18, 2022
The Bitcoin-Equity Correlation Will Continue
Bitcoin and the broader crypto markets have closely watched the moves on Wall Street this year. Moreover, the current macroeconomic setup looks quite uncertain, with fears of an impending recession still high.
The Fed is more likely to proceed with interest rate hikes in order to rein in soaring inflation. As a result, the equity market will continue to face the heat of quantitative easing measures. Jamie Douglas Coutts, senior market structure analyst at Bloomberg Intelligence, wrote:
“In the short term, correlation risks are heightened as equities, especially tech stocks, are delicately positioned at key resistance levels.”
Another warning sign for Bitcoin investors is that accumulation by long-term investors has slowed significantly. Ainsley To, Marc Chan and Noelle Acheson of Genesis wrote: “After a steady rise in the first half of 2022, the amount of Bitcoin that has not moved for over a year has stabilized, signaling a pause in the behavior longer-term accumulation.
Major cryptocurrencies like Bitcoin and Ethereum (ETH) are still trading at a 50% discount year-to-date. However, relief rallies saw jumps of 50-100% from their lows in June.
The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.