The price of Bitcoin (BTC) is increasingly correlating with that of tech stocks amid widespread uncertainty in the crypto markets, according to analytics firm IntoTheBlock.
In a new article, the market intelligence agency says that Bitcoin’s congruence with the Nasdaq 100 has reached a level it hasn’t seen in nearly two years and that the anticipation of looming regulations is causing investors to be skeptical.
“Bitcoin’s correlation vs the Nasdaq 100 reached its highest level since April 2020…
Now that artificially high monetary conditions are coming to an end, uncertainty is growing and buying interest is fading in anticipation of rate hikes and quantitative tightening.”
The market insights platform also says that based on their In/Out of the Money metric, they can find BTC’s key support and resistance levels.
“Based on this, we see high resistance around $38,000 where 1.27 million addresses previously bought 835,000 BTC. If Bitcoin clears that level, a move to $42,000 is likely.
On the other hand, some support can be expected at $35,000 where 291,000 BTC was acquired by 714,000 addresses. If this level fails to hold, Bitcoin should revisit its recent lows.
Momentum is still on the bearish side, though, with twice as many Bitcoin holdings near current price being held by addresses losing money on their positions.”
IntoTheBlock adds that investors can expect a potential upcoming supply shock of BTC due to the rate at which traders are currently moving the top crypto asset by market cap out of exchange platforms and into cold wallets or yield-generating protocols.
“Comparing the drawdowns experienced during May-July of last year and the current, the exchanges’ net flows paint [this] picture:
Between May and June of 2021, there were significant inflows of Bitcoin into exchanges (net amount of 130,000 BTC), coinciding with the sell-off that happened during that period.
This time, net outflows of 80,000 BTC suggest that less Bitcoin is available to buy at exchanges, as users tend to move these assets to cold storage or yield-generating strategies.
Ultimately, this suggests strong buying activity from holders, resulting in a potential supply shock as Bitcoin shifts from being held by short-term speculators to long-term investors.”
Bitcoin is exchanging hands at $41,490 at time of writing, an over 10% increase from its seven-day low of $36,920.
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