Don’t Sleep on This Key Sign Showing Bitcoin Bottomed At $3,700
Bitcoin2020/04/19 09:00 by Nick Chong
Last month, as the world began to grapple with the economic reality of the coronavirus outbreak, Bitcoin fell off a cliff — tumbling from $7,700 to $3,700 within the span of two days, a drop of over 50%.
Since then, a question that has plagued investors is if Bitcoin bottomed during that crash. While there is no decisive answer yet as BTC is “still not out of the woods,” so to say, there is evidence mounting that the March crash cemented a new macro low for this market.
Related Reading: This One Financial Trend Will Make Bitcoin Succeed: Billionaire
Bitcoin Bottom Might Be In, Market Volume Shows
The March crash was marked by a massive surge in volumes. During the plunge, volumes on derivatives exchanges went through the roof as high-leverage traders tried to profit from the near-record levels of volatility, while buying activity picked up on spot exchanges.
According to Mohit Sorout — partner at crypto exchange Bitazu Capital — this could be a clear sign that the bottom is in, remarking how Coinbase data indicates that every single macro top and bottom for the asset over the past 2.5 years has been marked by a series of high-volume trading weeks like the ones we’ve just seen.
Spot volume on $BTC is trying to tell something.
Wonder what it means. pic.twitter.com/TrSP4vX63k
— Mohit Sorout (@singhsoro) April 18, 2020
To add to this, crypto analytics firm Glassnode observed that one of its proprietary indicators, which tracks the profitability of short-term BTC holders, is on the verge of entering a territory that has historically coincided with the end of bear trends and the start of full-blown bull markets.
Similar Sentiment On Wall Street
Wall Street traders and analysts are also starting to agree that the bottom for the S&P 500 and other equity markets is in as well, boding well for Bitcoin, which has largely traded in-step with American stocks over the past four weeks.
Goldman Sachs — the multinational investment bank — wrote in a research note published last week that their downside target of 2,000 points has been invalidated, calling it “no longer likely.” They continued that from how they see it, an 8% rally from the current price to 3,000 by year-end is highly possible.
To back their optimistic assertion, which is a reversal from the calls for a 2,000 S&P 500, they cited a “flattening [of the] viral curve” and “unprecedented policy support” from the government that could help stocks (and Bitcoin too).
Goldman’s analysts added that S&P 500 bear markets usually “trough shortly before economic data inflect,” again suggesting the bottom is behind the market. The above chart of “weeks between S&P 500 bear market bottom and peak in weekly jobless claims” shows this.
As Bitcoin continues to track the stock market, it would suggest that should the S&P 500 continue its rapid ascent higher, so too should the value of cryptocurrencies.
Related Reading: Crypto Tidbits: Bitcoin Retakes $7,000, China’s CBDC Is Here, Wall Street Wants BTC & Ethereum
Photo by Chris Liverani on Unsplash
2 Like(s)
You should also read...
Bitcoin01/12/19 14:11 by Christine Vasileva
US Stock Markets to Have a Slow 2020, Will Investors Turn to Bitcoin and Crypto?
The US stock market rally in 2019 surprised skeptics, as indexes continued to surge despite underwhelming performance and setbacks for the FAANG stocks. But Wall Street pundits are predicting that 202... Read More
Altcoins15/05/20 19:30 by Tony Spilotro
Strong Correlation Between Bitcoin and Stock Market May Finally Be Over
The tight correlation between Bitcoin and the stock market has been deteriorating in recent days. And following the latest price action, the correlation may finally be over and Bitcoin can break free ... Read More
Bitcoin23/06/20 15:00 by Yashu Gola
Bitcoin S2F Creator: Whales Didn’t Crash Price in March 2020
Whale manipulation did not crash the price in March 2020, asserts Stock-to-Flow creator PlanB.
The analyst claimed that the cryptocurrency’s growing correlation with the U.S. benchmark S&P ... Read More
Bitcoin27/06/20 11:01 by Yashu Gola
Bitcoin is At Mercy of S&P 500, as “Fragile” Stock Market is at Risk
Bitcoin faces a critical second half of the year as its correlation with the S&P 500 index nears 43 percent.
While both markets have rallied impressively from their March 2020 lows, they are far ... Read More
Crypto16/07/20 23:00 by Tony Spilotro
Is The Greater Global Stock Market Once Again Dragging Down Crypto?
Bitcoin has been consolidating below resistance for months now, waiting for a spark to ignite an explosion in either direction. Due to the ongoing correlation between BTC and stocks, a crashing global... Read More
(@singhsoro) April 18, 2020
To add to this, crypto analytics firm Glassnode observed that one of its proprietary indicators, which tracks the profitability of short-term BTC holders, is on the verge of entering a territory that has historically coincided with the end of bear trends and the start of full-blown bull markets.
Similar Sentiment On Wall Street
Wall Street traders and analysts are also starting to agree that the bottom for the S&P 500 and other equity markets is in as well, boding well for Bitcoin, which has largely traded in-step with American stocks over the past four weeks.
Goldman Sachs — the multinational investment bank — wrote in a research note published last week that their downside target of 2,000 points has been invalidated, calling it “no longer likely.” They continued that from how they see it, an 8% rally from the current price to 3,000 by year-end is highly possible.
To back their optimistic assertion, which is a reversal from the calls for a 2,000 S&P 500, they cited a “flattening [of the] viral curve” and “unprecedented policy support” from the government that could help stocks (and Bitcoin too).
Goldman’s analysts added that S&P 500 bear markets usually “trough shortly before economic data inflect,” again suggesting the bottom is behind the market. The above chart of “weeks between S&P 500 bear market bottom and peak in weekly jobless claims” shows this.
As Bitcoin continues to track the stock market, it would suggest that should the S&P 500 continue its rapid ascent higher, so too should the value of cryptocurrencies.
Related Reading: Crypto Tidbits: Bitcoin Retakes $7,000, China’s CBDC Is Here, Wall Street Wants BTC & Ethereum
Photo by Chris Liverani on Unsplash
