Bitcoin continues to lose momentum on low timeframes, as bulls were unable to follow through on yesterday’s upside impulse. The cryptocurrency was rejected around the mid-area of its current levels and might be bound for a fresh re-test of local support.
At the time of writing, Bitcoin price trades at $20,000 with a 1% loss and a 3% profit in the last 24 hours and 7 days, respectively. Despite its negative price performance, BTC remains relatively strong when compared with other cryptocurrencies in the top 10 by market cap.
Bitcoin At Record Correlation With Gold And Equities In 2022
Data from Kraken Intelligence shows that Bitcoin has been increasing its correlation with risk-on assets, and with other traditional assets in the legacy financial market. This phenomenon has been common across 2022, as global markets move in tandem reacting to the U.S. Federal Reserve (Fed).
The financial institution has been trying to slow down inflation in the U.S. dollar by hiking interest rates. This has brought negative consequences across all assets class.
As seen in the charts below, the price of Bitcoin saw a decline in its correlation with major equities indexes, the Nasdaq 100 and S&P 500. In the past months, this correlation stood at its low below 0.5 but is re-approaching high correlation levels at around 0.8 and 0.74, respectively.
Something similar is happening with Gold and U.S. Treasuries. Unlike stocks, Bitcoin has been less correlated to the precious metal and U.S. Treasuries, but that appears to be changing in light of the increase in economic uncertainty.
Earnings Seasons Might Cap Bitcoin Bullish Momentum
This data suggest that Bitcoin might be more and more susceptible to events related to stock and major indices. Jurrien Timmer, Director of Macro for Investment firm Fidelity, believes the upcoming earnings season might…
