The cryptocurrency market took a turn for the worst on April 11 as concerns about growing inflation and the possibility of a number of more interest rate hikes by the US Federal Reserve surfaced. As the correlation with the Nasdaq 100 reaches a key milestone, the price of bitcoin could see a trend reversal. Analysts are optimistic about Bitcoin’s price rise and have set a target of $52,000 for the cryptocurrency.
Where will Bitcoin head next?
For almost six months, the price of bitcoin has marched in lockstep with the Nasdaq 100 index. Bitcoin, according to Bloomberg analysts, is more in sync with big technology stocks than it has ever been.
Last Friday, the 40-day correlation between Bitcoin and the Nasdaq 100 reached an all-time high of 0.6945. The idea that Bitcoin is a diversifier of assets in an investor’s portfolio is being eroded by the rise in correlation. However, traditionally, an increase in this correlation has pushed Bitcoin’s price upward.
Bitcoin’s link with tech equities has driven price increases in prior bull runs, such as in 2017 and 2020. The demand for Bitcoin has risen in lockstep with the rise in Nasdaq 100 stock correlation.
The price of bitcoin has recently dropped below $40,000. Increased outflow from cryptocurrency exchanges, activity in Satoshi-era Bitcoin wallets, and a strengthening correlation with technology stocks, according to proponents, might drive the asset’s price higher.
Bitcoin, according to @Koolaid_crypto, a pseudonymous crypto expert, experienced selling pressure over the weekend, as well as a macro pattern that resembled a descending expanding wedge. Bitcoin’s price could challenge the 61.8 percent Fibonacci retracement level at some time, according to the analyst, who has a bullish outlook on the cryptocurrency.
At the time of writing Bitcoin has dropped below the $40,000 mark and has lost more than five percent.