Bitcoin had once dipped below $20,000 in late June and July amid concerns over rising interest rates and inflation, as well as internal cryptocurrency issues such as the ecosystem imploding Earth/Moon and hedge fund Three Arrows Capital.
While it is a long way from the all-time high of around $69,000 November, has started to show some strength of late as the stock market recovers.
In fact, in July, the S&P 500 index gained 9%, the most since November 2020.
Even so, Bitcoin is hitting some major resistance points and its recent rally might be legless, according to Katie Stockton, co-founder of Fairlead Strategies, a research firm focused on technical analysis.
“Bitcoin remains a useful indicator of risk appetite as one of the most volatile risk assets,” Stockton said, noting that “the implications are that the rally will fade in the coming days, regardless of the breakout in the SPX.” “.
“August promises to be just as harrowing for Bitcoin with more bouts of volatility guaranteed,” Antoni Trenchev, co-founder and managing partner of cryptocurrency lender Nexo, told Bloomberg.
In fact, he noted that it is “leaning toward a repeat of July resistance over June capitulation” after “Bitcoin absorbed last week’s macro hit” from the Federal Reserve rate hike and data showing The US economy shrank for the second consecutive quarter.
“Cryptocurrencies and stocks have been positively correlated with each other, and that has been especially the case for mega-caps.” Jake Gordon of Bespoke Investment Group in a note late last week, citing strong results from large-cap tech companies, which “likely helped drive risk sentiment to push crypto higher.”
“The reason we are not bullish on crypto yet is because there are no business models that we are aware of that generate revenue outside of other crypto applications”he added.
However, he said that “as digital assets become a more mature asset class with the entry of institutional investors, a lot of on-chain adoption and development, over time you will see people looking at digital assets. from a different perspective.”
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
