However, this lower correlation with US equities, as well as other technical and fundamental factors, could ultimately lay the groundwork for a sustained rebound in Bitcoin.
1. Correlation with equities
First, the lower correlation with equities, if confirmed over time, could make Bitcoin more attractive from a diversification standpoint.
In fact, it is worth remembering that not long ago one of the main arguments of Bitcoin fans was that BTC could become a kind of digital gold.
2. The technical aspect of the BTC/USD pair
The context does not preclude the development of a fundamental uptrend. In fact, Bitcoin sent a major long-term bullish chart signal earlier in the month, breaking a downtrend line that had been pushing it lower from the November 2021 all-time high.
Furthermore, BTC/USD has not made new lows since June 18, and has been consolidating in a tight range since mid-September, which could be interpreted as an accumulation phase that heralds a change in the direction of the cryptocurrency.
As for the next steps to further improve Bitcoin’s profile, these include breaking the main psychological threshold of $20,000, as well as the 100-day moving average, currently just below the $21,000 threshold.
3. The role of the whales
Beyond the graphical context, another factor points to the possibility of a new fundamental uptrend in Bitcoin.
According to a report published yesterday by CryptoQuant, some 48,000 Bitcoins flowed out of Coinbase Pro, an exchange platform popular with institutional investors, worth $940 million.
This is the largest outflow of funds since the collapse of the cryptocurrency in June this year and the second largest of all time. However, platform outflows suggest that investors are taking their bitcoins off exchanges and storing them in offline crypto wallets, meaning they are moving from a selling approach to an accumulating approach.
The report further notes that transactions were partially split into batches of 122 bitcoins, noting that this is the same pattern that has repeatedly occurred during the 2021 uptrend.
Source: Ambito
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