Key facts:
-
BTC support level fell from $45,000 to $40,700, retracing two weeks of highs.
-
The bitcoin price maintains a high correlation with Nasdaq tech stocks.
The price of bitcoin (BTC) suffered a drop in the last week from USD 46,900 to USD 40,700. In this way, it goes back to the value it had three weeks ago and creates uncertainty regarding where it will go from now on.
The movement of the cryptocurrency signals that it failed to defend its support level at $46,000, even though bullish traders have been buying at that value. Even so he did, with a powerful buy of USD 190 million in BTC, MicroStrategy, one of the most important whales worldwide for being the publicly traded company with the most bitcoinsfounded and directed by Michael Saylor.
Despite this, some traders have been selling to take profits, following bitcoin hit its 2022 high in late March when it traded at $47,500. The sales, together with the non-consolidation of a bullish demand, made its price of bitcoin fall approaching USD 40,000, which has triggered fear among investors, according to metric Bitcoin Fear. This breaks with the calm and neutrality that was early last week in the market.
archyde news
The picture shows that there is weakness in the demand for bitcoin due to higher prices, which is not helping the market grow. Although setbacks are always expected, analysts they foresaw that if the drop is very large and support does not return to $45,000, the market would bid towards lower numbers.
In this way, what is in question now is whether its value will continue to decline, or the holders Y buyers they will manage to hold the price support above $40,000. Market analyst Alex Kuptsikevich said today that fixing below the current price may open a direct path to the March lows area near $38,000.
Other referents remain more bullish, such as market specialist Matt Maley, who assured that he does not consider the liquidation to be particularly worrying. “The pullback from the late March high is more technical than anything else,” he said.
Maley stated: “After its 35% rally from January to the end of March, Bitcoin had become very overbought. So it’s just working on that condition. As long as it can sustain above $40,000, its multi-month uptrend will remain intact.”
Bitcoin Price Correlates With Nasdaq Tech Stocks
The situation of the cryptocurrency is very similar to what the shares of technology companies on the Wall Street Nasdaq stock exchange are reflecting, which are under the code NDXT. Although bitcoin is distinguished by its volatility, during the last month it has behaved very similarly to these traditional market assets.
Although, it is worth clarifying that the rise of bitcoin It’s been bigger than Nasdaq tech stocks during this time. Even despite the current fall, BTC maintains a growth of 3.83%, while NDXT of 1.05% in the last month, as seen in the comparison graph of TradingView.
Market specialist Joanna Ossinger communicated today that expectations of a tighter monetary policy with higher interest rates in the United States have affected the demand for riskier assets. This includes cryptocurrencies and tech stocks, which are increasingly moving in tandem, she clarified.
In this way, it can be seen that United States government decisions have had weight on the price of BTC, despite the million-dollar purchases made by companies such as MicroStrategy and Terra, which were expected to have a greater impact on the market.
Although the correlation with the Nasdaq shares can be seen as a maturity acquired by the BTC market over the years, at the same time some analysts read it as a detrimental sign for its price. This is because it shows that investors are seeing it as a highly volatile speculative asset in conflicts of war and economic crisis with increase in global inflation.
That is, bitcoin is not displayed as a commodity in the eyes of investors, which is the winning market this season. Since the Russian attack on Ukraine began, the gold price has grown almost 2% according to Gold.org and that of oil has seen an increase of around 16%, for example, in the case of WTI, as shown Business Insider. It will be necessary to see if BTC manages to overcome the current setback and overcome the USD 50,000 that some analysts predicted.
