Bitcoin (BTC) with a 95% correlation to the SP 500 index Traders could be hunted this week as an analyst warned a 400 point decline could occur soon.
In the latest installment of his YouTube series “Trading Bitcoin”, Tone Vays focused on Bitcoin’s stock targeting.
The expected “decoupling” is in danger
The price of The BTC / USD pair fell on June 25, when the markets lost by far due to new concerns about coronavirus infection.
Despite optimistic forecasts for Bitcoin this week, the cryptocurrency is closely correlating with the major stock markets He was back in the spotlight when the pressure down increased. At the time of this release BTC / USD had avoided falling below $ 9,000 to $ 9,200.
Theories had long said that Up until this week, Bitcoin “decoupled” itself from the influences of the global economy. although the data similarly show the level of correlation, especially with the S P 500.
With the increase in infections, The markets were also concerned about the US unemployment rate that were predicted beforehand, reports Bloomberg Thursday: 1.48 million a week.
“As I’ve been saying for months, I have no reason to depart from my prediction earlier this year that Bitcoin will get stuck between $ 6,000 and $ 10,000 for most of this year.”
Quarterly graph of Bitcoin price vs. the SP 500 index. Source: Skew
Vays predicts a minimum price of $ 7,000
On a technical levelWhat worried Vays was Bitcoin’s relative strength index (RSI). while BitMEX financing rate It was bullish on Thursday, which generally contradicts the market indicators.
“At the moment, the BitMEX funding rate favors bulls, which tells us that BitMEX traders are a little bit excited,” he continued.
The RSI, which was below a long-term trend line in June, appeared At the same time, Bitcoin’s price level reached higher points compared to May, a remarkable divergence, says Vays.
If the bears win The minimum for BTC / USD should be in the range of $ 7,000. with an RSI of around 30, he added.
The outlook for stocks was bleak: the lack of a firm support zone could drop the SP 500 by 400 points, or 12% in the event of a weak conclusion.
Various analyzes previously warned against this This month, this would create the conditions for a massive stock market correction event.