Bitcoin resumed its decline along with US stock indices. The fall in stock indicators was mainly caused by the sell-off of shares of the technology sector after the Fed's representative Brainard signaled a possible rate hike as early as March.
According to the Kaiko platform, the correlation between bitcoin and the S&P 500 stock index has increased to its highest level since July 2020. At the beginning of this week, the correlation index reached 0.61, writes coin spot.
Bitcoin belongs to the category of risky assets and mainly moves in the same direction as the shares of technology companies. The strong dependence of cryptocurrency on the stock market is observed against the backdrop of the US Federal Reserve's readiness to raise rates already this quarter.
Meanwhile, Fidelity Investments believes that Bitcoin has completed the correction and reached the “bottom” at $40,000.
SEBA Bank CEO Guido Buhler predicts Bitcoin will rise to $75,000 this year due to the massive influx of institutional investors into the crypto market.
“Our internal valuation models point to a price between $50,000 and $75,000. I'm pretty sure we'll see that level. Institutional money is able to raise the price, the question is in time,” he explained.
Hong Fang, CEO of OKCoin crypto exchange, is more optimistic. She is confident that the bitcoin rate will be able to reach $100,000 in 2022.
Crypto analyst Lark Davis warned on Twitter that a “death cross” technical analysis pattern is forming on the daily chart of bitcoin, indicating a possible decline in the asset. This figure was formed on the BTC chart only eight times in history.
A "death cross" or dead cross is formed when the 50-day moving average crosses below the 200-day moving average.
“If the dollar returns to growth in the near future, this will return pressure on the stock markets. The crypto-currency market in these conditions is at risk of turning downward again, stopping the rebound and remaining within the protracted downward channel.”