New data from IntoTheBlock reveals that Bitcoin (BTC) is showing relative strength against the stock market amid declining macroeconomic conditions.
In a new article, Lucas Outumuro, the analytics firm’s head of research, says that the crypto king’s price action last week has been “remarkable” while the stock market tumbled.
“As expected, the Federal Reserve did not raise interest rates this week. However, through their dot plot they did project one more hike this year and only two cuts into late 2024, showing their commitment to the higher for longer mantra.
This sent 10-year yields to their highest since 2007, putting pressure on markets. The Nasdaq and the S&P 500 are down 3.3% and 2.7%, respectively, so far this week. Yet Bitcoin has shown relative strength, managing to hold at the same price of $26,600 as last week and outperforming throughout the past 30 days.”
Outumuro goes on to explain why the top crypto asset by market cap’s price has remained steady despite tough macro conditions. According to the analyst, there are three factors contributing to Bitcoin’s relatively stable price.
“Some key points that may explain Bitcoin’s steady price:
- Bitcoin’s correlation to the dollar has hit a value of zero, putting it in a strong position despite the DXY’s (US dollar index’s) rally.
- The Bitcoin ETF (exchange-traded fund) passing continues to be a positive catalyst on the horizon, making holders hesitant to sell in advance.
- Mt Gox’s repayment, where they plan to send 850,000 BTC ($23 billion) to users affected by their hack, was delayed by a year, easing the selling pressure that was anticipated if they had begun redistributions next month as previously planned.”
The analyst also highlights that Hodlers, or entities that have kept their BTC dormant for over a year, now own a near record-high of 13.44 million BTC, representing about 69% of the available supply.
“Overall, this trend appears to signal a bullish cycle for Bitcoin may be approaching. Though it’s unclear how long Bitcoin’s outperformance will last in a worsening macro environment, on-chain data shows that its long-term investors continue to accumulate regardless.”
Bitcoin is trading for $26,109 at time of writing.
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Featured Image: Shutterstock/Tithi Luadthong
