BitcoinNews

Has BTC Established Its Bottom Yet or Will It Drop Further?

Bitcoin (BTC), the largest crypto by market cap, has hit the 0.786 level of a long-term Fibonacci retracement. Does this mean that the bottom for BTC and the rest of the crypto market has been formed?

To better answer the question about whether or not the crypto market bottoms have been formed, it’s best to take a look at the current situation with the S&P 500.

Historically, the price movement of BTC has simulated that of the index to a certain degree. This was seen in the 2018 crypto bear market and the start of the COVID-19 pandemic. Both BTC and the S&P 500 Index are down over the last month. S&P 500 is down by 7.52% and BTC is down -33.50% over the last 30 days.

The correlation can also be seen today as the S&P 500 is up by 0.22%, while BTC is up by 2.56% in the last 24 hours.

With this correlation, there are fears that BTC has not established its bottom yet. The main reason for this is that BTC may be at the mercy of traditional stocks. With this in mind, a pattern has been established historically wherein stocks only recover once the U.S. Federal Reserve eases monetary policy.

This is a silver lining for crypto investors because they can now potentially gauge when BTC will hit its bottom.

However, the problem with this silver lining is that the U.S. Fed has shown no intention of easing monetary policy, quite the opposite in fact, as they have increased the interest rate by the largest percentage in the last 40 years. The Fed has also indicated that more interest rate increases will happen throughout the year.

With this being the case, BTC’s price may not have hit its bottom yet.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.


Source

Back to top button