做空

Bitcoin price loses correlation with the stock market On 17 May

On 17 May, Bloomberg that the price of Bitcoin is at a high level of correlation with the shares of technology companies.

At the time, it was suggested that the main cryptocurrency was perceived as a growth asset, fuelled by:
→ the launch of Bitcoin ETFs;
→ expectation of Fed rate cuts.

But here was yesterday's Fed meeting, where the intention to cut the rate 1 or 2 (if inflation slows down more actively) times before the end of the year was announced. And with that, the Nasdaq 100 index of tech stocks rose to an all-time record of over 19,500 points. Bitcoin's price, on the other hand, is acting less confidently.

As the BTC/USD chart shows:
→ amid yesterday's news of declining inflation, the Bitcoin exchange rate jumped about 3% in 2 hours;
→ and today the price has returned to the levels before the news was released. What's more - it's gone lower. This is a bearish sign.

According to a technical analysis of the Bitcoin to US dollar chart:
→ the price has been oscillating for a long time along the median of the expanding fan, which originates back in November 2023;
→ each time the price deviated from the rising median, it returned to it (as indicated by the arrows) - thus showing that the consensus of market participants regarding the bullish outlook was stable.

Now the situation is changing:
→ having deviated down from the median, the price is having trouble getting back up (as shown by today's decline under the start of yesterday's upswing);
→ the psychological level of 70k is providing resistance;
→ the descending channel (shown in yellow) is becoming more apparent.

This could mean that the consensus is crumbling and there is a shortage of buyers in the market willing to pay more than 70k for the coin. The inability of the Bitcoin price to perform as strongly as the Nasdaq 100 index going forward will support this thesis. I expect a decline to the 1st support line below the median.