With Bitcoin giving up the $20,000 support level on the charts, eyebrows are finally starting to rise. The market rally we saw in July has faded into downtrends in the Bitcoin community. The same can also be seen when looking at Bitcoin’s long-term relationship with the stock market.
Ergo, the question – what will the future of the leading token in the cryptocurrency market look like?
Despite the macroeconomic uncertainty, the recent interest rate hike by the Federal Reserve has taken the form of market easing. However, Bitcoin has seen a drop in the market over the past few days. There was also a sharp drop in the broader market. Here, it is worth emphasizing that this reduction came on the back of Fed Chairman Powell’s speech as well.
The index below highlights the evolution of Bitcoin, Nasdaq 100, gold and silver prices over the past month. The Nasdaq 100 is down 6% from the previous month’s high and has maintained a 5% return over the past month. Conversely, Bitcoin is down about 14% from its highest level last month.
This divergence between these price movements has lowered the correlation between the assets.
Famous analyst Ali Martinez also recently shared ideas About Bitcoin and how it’s trending lately. After the recent pullback, Martinez claimed that Bitcoin has lost “two important supply areas.” One of them is $21,150, where 1.2 million addresses bought 635k bitcoins and another for $23,000, where 634k addresses currently hold 684k bitcoins.
The only “big support” he thinks is $19,200 where over 421,000 addresses have already bought 333,000 bitcoins.
Now what about BTC?
With cryptocurrencies dropping across the board, trader profitability has also taken a sharp turn. After seeing some relief in the first few weeks, MVRV dropped below the support line.
At the time of writing, MVRV is showing a reading of -11.28%, indicating negative returns for bitcoin traders at the moment.
Simply put, it is not the time to hold bitcoin. Only time will tell if there are better days before the world’s largest cryptocurrency.