Bitcoin is finally breaking its correlation with the stock market, which has persisted despite the strength of the recent uptrend.
An example of the ongoing impact of this correlation is yesterday’s sell-off. The rejection at $ 13,800 comes almost instantly after investors saw a sharp drop in stock futures.
Although yesterday was a slightly rough day for Bitcoin, it quickly shook off the weakness caused by the recent turmoil in the stock markets and has risen higher since then.
An on-chain analyst is now finding that the benchmark cryptocurrency is now flashing some of its first signs of macro decoupling from the exchange.
This is particularly being driven by a group of investors as they note that new retail market entrants have supported this recent uptrend.
The convergence of institutions and companies buying Bitcoin, as well as private investors, signals that serious upward movements could be imminent in the short term.
Bitcoin is bouncing back towards key resistance
Bitcoin is about to move back towards its key resistance level of $ 13,800, which sparked the recent sell-off that caused it to fall by $ 1,000.
At the time of writing, Bitcoin is trading a little over 2% from its current price of $ 13,500. This is a massive increase from recent lows of $ 12,800 at the end of yesterday’s sell-off.
$ 13,800 is a region of historic importance as this is where the 2019 rally peaked in late June before BTC hit a “blow-off top” and plunged lower.
If that level is broken, crypto could see a sharp spike, taking it to its all-time high.
On-chain analyst: BTC is showing the first signs of decoupling from the stock market
Willy Woo – a well-respected on-chain analyst – recently stated in a tweet that Bitcoin and the stock market are now showing their first signs of macro-decoupling behavior.
He notes that this is being driven by the influx of new retail investors providing serious price support.
“First signs of a decoupling behavior between BTC and stocks. Buying from an influx of new users provides price support that prevents speculators from trading down the correlation. NVTP is approaching a rating for BTC at the speed of organic investors on the blockchain. ”
Image Courtesy of Willy Woo.
How Bitcoin reacts to another potentially imminent remainder of $ 13,800 should provide some serious insight into its medium-term outlook.
Featured image from Unsplash. BTCUSD pricing data from TradingView.