Investors, particularly those in the cryptocurrency space, are feeling the pressure as they await the Federal Reserve’s decision on interest rates for September. Digital assets, with Bitcoin at the forefront, have succumbed to this pressure. Following a rejection at $27,200, Bitcoin slid below the $27,000 support. Efforts to regain control above $27,000 were in vain, with losses extending down to $26,600. The price of Bitcoin, down by 0.5% in the last 24 hours, currently trades at $26,606.
A Milestone: Bitcoin’s Correlation with the US Dollar Index
According to the on-chain analysis platform IntoTheBlock (ITB), the correlation between Bitcoin’s price and the US Dollar Index has reached a new milestone. It suggests that the world’s most potent currency has virtually no impact on BTC.
In its statement through X, ITB stated, “Currently, there is almost no correlation with any major indexes.” As Bitcoin aims to shape its trajectory toward the 2024 halving, the question arises: is this lack of correlation a signal of an upcoming rally or a decline?
Has Bitcoin Hit Rock Bottom?
Among investors, mixed sentiments prevail. They question whether Bitcoin has hit rock bottom or if it needs further retracement. This retracement may be necessary before aligning itself for the next bullish trend. This trend could potentially be driven by the halving of miner rewards expected in April 2024.
Based on the short-term outlook, it is probable that more downside lies ahead before Bitcoin encounters the significant hurdle at $31,000, marking the next substantial leap. The stalling at $27,000 signifies that, despite the market’s structural improvements in September, the uptrend lacks sustainable momentum.
Deciphering The Bitcoin Trend
Crypto trader and analyst @rektcapital suggested that drawing from the bottom of the 2018 bear market, Bitcoin may not have reached rock bottom yet. He pointed out that, before the previous bull run in 2021, BTC revisited a macro higher low in March 2020.
If history repeats itself, the “2022 Bear Market Bottom may similarly form another Macro Higher Low.” This pattern might be revisited in the future. The ongoing struggle with Bitcoin’s price could lead to a potential revisit of the $25,000 support level. This revisit might occur before the trend toward the 2024/2025 bull market begins to take shape.
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