Bitcoin Maintains Near 19-Month High Despite Downturn in Global Assets
Bitcoin, defying the downward trend in global markets, surged to a 19-month high, indicating its detachment from conventional assets.
On Monday, the token rose by 5.8% to reach $42,000, maintaining proximity to that level as of Tuesday at 8 a.m. in New York. This ascent contrasts with the declines witnessed in global stocks and bonds since the beginning of the week.
Sean Farrell, Head of Digital Asset Strategy at Fundstrat Global Advisors LLC, highlighted this divergence.
Bitcoin's correlations with stocks and gold have diminished in 2023, contributing to its impressive 152% surge. Anticipation surrounding the potential approval of the first spot Bitcoin exchange-traded funds in the US is a significant driver behind these gains, likely broadening the demand for the token.
The 90-day correlation coefficient between Bitcoin and MSCI Inc.'s world shares index dropped to 0.18 from 0.60 earlier in the year. A similar trend is seen with the token's correlation with spot gold, nearly reducing to zero from 0.36. These figures indicate the decreasing synchrony between these assets.
Regulation within the crypto industry is another factor driving market sentiment. Executives are optimistic that the stringent US crackdown on the sector might have subsided following recent cases involving prominent figures like Sam Bankman-Fried of FTX and Binance's fines for violations.
Some technical indicators suggest a potential stretch in Bitcoin's rally, such as the 14-day relative strength index standing at 75, above the overbought level of 70.
The speculation around the approval of US spot Bitcoin ETFs by the Securities & Exchange Commission and anticipation of Federal Reserve interest-rate cuts next year have bolstered investor confidence. Robinhood Markets Inc.
The sustainability of Bitcoin's rally might hinge on the outcome of the decision regarding the spot ETF, as noted by research provider Kaiko.
#BinanceTournament #BRC20 #AltCoinSeason #JTO #ORDI #bitcoin
