• Bitcoin (BTC) fell around 1.5% on Tuesday to the $29,700 area and briefly hit fresh one-month lows around $29,500 earlier in the day.
• BTC’s latest slide has seen it dip around 2.5% below its 21-Day Moving Average.
• Historically, bitcoin has had a strong positive correlation to the US stock market but this correlation has decreased in 2023.
Bitcoin (BTC) Slides Below $30K
Bitcoin (BTC), the cryptocurrency that powers the world’s largest decentralized cryptographically secured network in the world, fell around 1.5% on Tuesday to the $29,700 area and briefly hit fresh one-month lows around $29,500 earlier in the day. BTC’s latest slide has seen it dip around 2.5% below its 21-Day Moving Average. If the cryptocurrency also loses its grip on support in the mid-$29,000s from late June/early July, a dip to support in the mid-$28,000s is likely.
Should Pump if These Correlations Re-emerge
In recent years bitcoin has typically had a strong positive correlation to the US stock market as most investors trade it as a “risk assets” like stocks. Bitcoin also had a same positive correlation with easing liquidity conditions as the stock market which saw bitcoin pump last year with low interest rates and massive QE from central banks before then pulling back sharply in 2022 when those same central banks started rapidly lifting interest rates due to inflation. However since 2023 there has been a sharp decrease of this correlation as some view bitcoin more as a safe haven alternative compared to fiat currency financial system which saw it pump during mini crisis of March when US stocks fell due to worries about economic growth impact .
Positive Correlation To The US Stock Market
In 2020/2021 bitcoin pumped in tandem with the stock market on low interest rates and massive QE from central banks before then pulling back sharply when they started rapidly lifting interest rates due to rampant inflation which resulted into decrease of correlations between them since 2023 . This could be because some are coming to view bitcoin more as its creators have always wanted it – as a safe haven alternative compared centralized fiat currency financial system .
Macro Tailwinds Could Come To BTC’s Aide
If some of bitcoin’s historically strong correlations such as positive ones with US stock market and dollar return , then this could set up for a pump for BTC . That could be because while bitcoin is an mainstream asset most investors still view and trade it as “risk assets” much like stocks so if these correlations reemerge than we could see an uptrend for BTC .
Conclusion
To conclude , while short term technical outlook for Bitcoin is precarious , macro tailwinds such us return of correlations between BTC & US stock market & dollar could result into an uptrend for crypto giant .