{"id":3294,"date":"2022-04-11T09:37:14","date_gmt":"2022-04-11T09:37:14","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=3294"},"modified":"2022-04-11T09:37:15","modified_gmt":"2022-04-11T09:37:15","slug":"btc-stocks-correlation-not-what-we-want-5-things-to-know-in-bitcoin-this-week","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=3294","title":{"rendered":"BTC stocks correlation \u2018not what we want\u2019 \u2014 5 things to know in Bitcoin this week"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Bitcoin (BTC) starts the second week of April with a whimper as bulls struggle to retain support above $40,000.<\/p>\n<p>After a refreshingly low-volatility weekend, the latest weekly close saw market nerves return, and in classic style, BTC\/USD fell in the final hours of April 10.<\/p>\n<p>There is a feeling of being caught between two stools for the average hodler currently \u2014 macro forces promise major trend shifts but are being slow to play out. At the same time, \u201cserious\u201d buyer demand is also absent from crypto assets more broadly.<\/p>\n<p>However, those on the inside show no hint of doubt about the future, as evidenced by all-time high Bitcoin network fundamentals and more.<\/p>\n<p>The combination of these opposing factors is price action that simply does not seem to know where to go next. Can something change in the coming week?<\/p>\n<p>Cointelegraph takes a look at five potential Bitcoin price cues as a retest of $40,000 looms closer.<\/p>\n<h2>No \u201cmassive drawdown\u201d for BTC?<\/h2>\n<p>April 11 is starting out with a reclaim of $42,000 for BTC\/USD, which the pair briefly lost overnight as it dipped into the weekly close.<\/p>\n<p>Hitting $41,771 on Bitstamp in the process, Bitcoin thus saw its lowest levels in weeks, matching those from March 23.<\/p>\n<p><em>BTC\/USD 1-hour candle chart (Bitstamp). Source: TradingView<\/em><\/p>\n<p>In doing so, the largest cryptocurrency, likewise, gave up all of its gains from the intervening period to fall back to the top of its trading range from last month. However, this could end up being a retest of previous resistance as support. Instead of fearing the worst, many traders are hopeful that a reversal would soon kick in.<\/p>\n<p>\u201cBullish retest of flipped weekly level, finex whale filling bids, I\u2019m buying the dip. If you want to wait for confirmation you can wait for a monthly close to confirm,\u201d popular Twitter user Credible Crypto wrote as part of comments overnight.<\/p>\n<p>Credible Crypto was commenting on both Bitfinex whale buying and fresh chart data, showing that Bitcoin\u2019s Aroon indicator has flipped bullish in recent days.<\/p>\n<p>Designed to identify uptrends or downtrends in an asset, Aroon has only delivered such bearish-to-bullish \u201ccrosses\u201d six times since 2017 \u2014 the time of Bitcoin\u2019s previous blow-off top.<\/p>\n<p lang=\"en\" dir=\"ltr\">Pretty good odds of you ask me. Aroon is designed to act like both a smooth indicator and exponential one due to its behavior toward time instead of price. <\/p>\n<p>I\u2019m not expecting a massive drawdown.<\/p>\n<p>\u2014 Otsu (@OtsukimiCrypto) April 11, 2022<\/p>\n<p>As Cointelegraph recently\u00a0reported, trader and analyst Rekt Capital also had plenty of reasons to adopt a bullish thesis for Bitcoin. But, at around $42,150, the weekly close ultimately disappointed compared to his required $43,100.<\/p>\n<p>\u201cA BTC Weekly Candle Close like this and the retest of ~$43.100 as new support would be successful,\u201d he explained alongside a chart on April 10. <\/p>\n<p>\u201cTherefore, BTC would be positioned for a move higher inside the ~$43100-$52000 range, as per the previous blue circle.\u201d<\/p>\n<p>Cointelegraph contributor Micha\u00ebl van de Poppe, meanwhile, also noted that the late dip on April 10 had closed the potential for a CME Group futures gap to provide a short-term price target at the start of trading on April 11.<\/p>\n<h2>Stocks pressured across the board<\/h2>\n<p>It\u2019s a gloomy day for stocks so far, as Asia leads with widespread losses, thanks in no small part to China\u2019s latest COVID-19 lockdowns.<\/p>\n<p>Both the Shanghai Composite Index and Hong Kong\u2019s Hang Seng fell over 2% in morning trading.<\/p>\n<p>In Europe, markets were yet to open at the time of writing, but the ongoing geopolitical tensions focused on Russia showed no signs of change. <\/p>\n<p>A glimmer of hope for the euro came in the form of a potential lead for incumbent French President Emmanuel Macron against rival Marine Le Pen in polls.<\/p>\n<p>Beyond the short term, however, analysts are eyeing concerning trends: rapidly increasing inflation, bond market losses and a seeming inability for central banks to respond so far.<\/p>\n<p>The European Central Bank (ECB) is due to meet this week with a key focus on inflation control \u2014 ending asset purchases and raising interest rates.<\/p>\n<p lang=\"en\" dir=\"ltr\">The biggest bond bubble in 800yrs continues to deflate after the start of the Fed&#8217;s rate-hike cycle, ahead of next week&#8217;s #ECB meeting &amp; as rising #inflation shakes up bond mkts. Value of global bonds has dropped by another $960bn this week, bringing total loss from ATH to $6tn. pic.twitter.com\/g78Pu2dyLo<\/p>\n<p>\u2014 Holger Zschaepitz (@Schuldensuehner) April 10, 2022<\/p>\n<p>The situation underscores the difficulties stocks and risk assets face in the current climate. As commentators agree that the inflationary environment and associated central bank measures will reduce demand for Bitcoin and crypto, the true extent of the economic reality is already clear.<\/p>\n<p>In a previous Twitter post last week, Holger Zschaepitz revealed that for all the gains in the S&amp;P 500, for example, the Fed\u2019s asset purchases mean that progress has, in fact, been flat since the global financial crisis.<\/p>\n<p>\u201cJust to put things into perspective: The S&amp;P 500 may have hit a new ATH today, but if you put the index in relation to the Fed&#8217;s balance sheet, it is trading at the same level as in 2008, so equities have traded sideways since 2008, basically counteracting balance sheet expansion,\u201d he wrote.<\/p>\n<h2>Down together?<\/h2>\n<p>For Arthur Hayes, ex-CEO of derivatives giant BitMEX, the bullish case for Bitcoin as a store of value in the face of failing fiat is still there.<\/p>\n<p>The problem is that such a scenario is not reality \u2014 yet.<\/p>\n<p>In his latest blog post released on April 11, Hayes repeated warnings that pain would precede gain for the average investor with significant risk asset exposure.<\/p>\n<p>The future could well see a shift away from United States dollar hegemony toward different assets by nation-states and individuals alike, but in the meantime, macro forces will continue taking their toll on crypto.<\/p>\n<p>If stocks are due to dive as central banks act, notionally to combat inflation, crypto\u2019s increasing correlation to them means only one thing.<\/p>\n<p>\u201cThe short-term (10-day) correlation is high, and the medium term (30-day and 90-day) correlations are moving up and to the right. This is not what we want,\u201d Hayes argued about crypto correlations with the Nasdaq 100 (NDX). <\/p>\n<p>\u201cFor me to hoist the flag in support of selling fiat and buying crypto in advance of an NDX meltdown (30% to 50% drawdown), correlations across all time frames need to trend demonstratively lower.\u201d<\/p>\n<p>Could equities really see half their value removed as a result of the Fed and its actions? It would be anyone\u2019s guess, Hayes answered.<\/p>\n<p>\u201cDown 30%? [&#8230;] Down 50%? [\u2026] your guess is as good as mine,\u201d he added.<\/p>\n<p>\u201cBut let\u2019s be clear\u2013 the Fed isn\u2019t planning to grow its balance sheet again any time soon, meaning equities ain\u2019t going any higher.\u201d<em>Federal Reserve balance sheet as of April 4 (screenshot). Source: Federal Reserve<\/em><\/p>\n<h2>Sentiment diverges from traditional markets<\/h2>\n<p>With the macro gloom on the horizon, it is no surprise that market sentiment is taking a beating. <\/p>\n<p>Having sensed \u201cgreed\u201d across crypto at the end of March, the Crypto Fear &amp; Greed Index is now firmly back in \u201cfear\u201d territory.<\/p>\n<p>An analog of the traditional market Fear &amp; Greed Index, the metric has shed half its normalized score in under two weeks as cold feet return to traders.<\/p>\n<p>On April 11, Crypto Fear &amp; Greed measured 32\/100, while its traditional market counterpart was higher at 46\/100, defined as \u201cneutral.\u201d<\/p>\n<p>Deserved or not, Van de Poppe, meanwhile, reminded readers not to trade based on sentiment cues.<\/p>\n<p>\u201cEveryone was super bullish on the markets, but now the markets start to correct, and the fear takes over,\u201d he summarized. <\/p>\n<p>\u201cThe sentiment isn&#8217;t a great indicator of how you should trade usually.\u201d<em>Crypto Fear &amp; Greed Index (screenshot). Source: Alternative.me<\/em><\/p>\n<h2>Fundamentals keep the faith<\/h2>\n<p>A glimmer of hope comes from a familiar source this week. For all the price drawdowns, Bitcoin\u2019s network difficulty is only due to decrease by 0.4% in the next few days.<\/p>\n<p><strong><em>Related:\u00a0Top 5 cryptocurrencies to watch this week: BTC, NEAR, FTT, ETC, XMR<\/em><\/strong><\/p>\n<p>Arguably the most important aspect of the Bitcoin network\u2019s self-maintaining paradigm, the difficulty will adjust downward from all-time highs to reflect changes in mining composition.<\/p>\n<p>The adjustment\u2019s small size suggests that miners remain financially buoyant at current levels and are not struggling despite last week\u2019s 10% BTC\/USD dip.<\/p>\n<p><em>Bitcoin difficulty 7-day average chart. Source: Blockchain<\/em><\/p>\n<p>Further data supports the argument, with hash rate estimates from monitoring resource MiningPoolStats likewise lingering at record highs.<\/p>\n<p>As Cointelegraph recently\u00a0reported, mining continues to attract major investment, including from Blockstream, which last week announced a solar-powered farm set to generate 30 petahashes per second in hash rate once operational.<\/p>\n<p><em>Bitcoin estimated hash rate chart (screenshot). Source: MiningPoolStats<\/em><\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/btc-stocks-correlation-not-what-we-want-5-things-to-know-in-bitcoin-this-week\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin (BTC) starts the second week of April with a whimper as bulls struggle to retain support above $40,000. After a refreshingly low-volatility weekend, the latest weekly close saw market nerves return, and in classic style, BTC\/USD fell in the final hours of April 10. There is a feeling of being caught between two stools [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3295,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-3294","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/3294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3294"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/3294\/revisions"}],"predecessor-version":[{"id":3296,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/3294\/revisions\/3296"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/3295"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}