Bitcoin Needs to Reclaim $36K to Invalidate the Bearish Thesis, BTC’s Correlation with S&P 500 Hits ATH


Bitcoin (BTC) recently hit a 10-month low of $29K as more liquidation engulfed the market.

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Market analyst Ali Martinez believes a bearish picture is being painted in the BTC market because it has broken the historical trendline. For this to be invalidated, the leading cryptocurrency needs to reclaim $36K.

Martinez pointed out:

“Bitcoin has broken its historic trendline. The last two times this happened BTC retraced by 37.67% and 41.32%, respectively. Similar price action could see prices crash by 40.59% to $20,000. BTC would have to reclaim $36,000 to invalidate this bearish thesis.”

 

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Source: TradingView

The leading cryptocurrency was hovering around the $30,744 level during intraday trading, according to CoinMarketCapOn its way to $36K, Bitcoin will have to breach significant resistance at the $34,700 area. Martinez added:

“Bitcoin appears to be rebounding, but notice that it faces stiff resistance at $34,700 where over 668,000 addresses bought nearly 376,000 BTC.”

Bitcoin’s correlation with S&P 500 reaches historic highs

As more institutional investors continue jumping on the crypto bandwagon, the correlation between cryptocurrencies and stocks becomes stronger. 

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For instance, the three most majorly followed stock indexes in the U.S. – the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite – fell to their lowest level since 2020.

“Bitcoin correlation with the S&P 500 has reached a new frustrating all-time high,” Mati Greenspan, the CEO of Quantum Economics, said.

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Source: Mati Greenspan

Similar sentiments were shared by JoeDiPasquale, the CEO of crypto hedge fund manager BitBull Capital. He noted:

“The monetary policy tightening is causing investors to reduce their exposure to risk assets and BTC’s current correlation to the S&P 500 has led it to also drop today.”

Meanwhile, Edward Moya, a senior market analyst at forex exchange company Oanda, believes the drop in crypto prices is based on the sell-off witnessed in tech stocks. Therefore, stability in the Bitcoin market will occur when investors stop panic selling and the bloodbath on Wall Street ends.

Image source: Shutterstock




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