Incredible: Why is the price of Bitcoin (BTC) soaring while traditional markets are falling? – Mag Mirror





Bitcoin and Ether begin the week trading higher after a pullback over the weekend. Both currencies sank below key psychological levels before reversing steam on Monday.

The price of bitcoin (BTC) rose 1.9% in strong volume, regaining some of the 2.52% it lost over the weekend. The increase in volumes on Monday’s rally is another positive sign. However, BTC continues to trade in a relatively narrow range, alternating between bull and bear days. Currently, BTC is trading above the psychologically important $19,000 threshold.

Ether (ETH) rose 2.6% and maintains a strong 30-day correlation coefficient (0.78) with the price of BTC. The correlations range between 1.0 and -1.0, with the first number implying a direct relationship, and the second a completely inverse relationship. Given their strong relationship, it’s no surprise that ETH moved in tandem with BTC, both in direction and volume, over the weekend. ETH broke through the psychologically important $1,300 mark. The offer of the second largest crypto-currency by market cap is now up 8,400 ETH since transitioning to a proof-of-stake consensus mechanism. Without this change, estimates indicate that the supply of ETH would have increased by more than 140,000 ETH during the same period.

The CoinDesk Market Index (CMI), a broad-based market index that measures the performance of a basket of cryptocurrencies, rose 1.6% on the day.

Economic calendar: The calendar was relatively calm on Monday, ahead of the traditionally more important release of durable goods and home sales data on Tuesday.

In fixed income markets, yields on two-year Treasury bills rose to 4.3%, reaching levels not seen since August 2007. The yield curve between two-year Treasury bills and at 10 years remains reversed, the rates of the former being higher than those of the latter.

An inverted yield curve implies that investors place a higher degree of risk on short-term loans than on longer-term loans.

Historically, inverted yield curves have been precursors to economic recessions that negatively affect all risky assets, cryptocurrencies included.

US stocks: Traditional stocks fell, with the Dow Jones Industrial Average (DJIA), Nasdaq composite and S&P 500 down 1.1%, 0.6% and 1% respectively.

Commodities: WTI crude oil fell 2.4% and is now trading below $80 a barrel. European Brent crude fell 2.3% to below $85, while natural gas was up 3%. Copper, often used as a barometer of economic health, fell 1.3%, while safe-haven gold fell 1.3%.

● Bitcoin (BTC): $19,164 +1.3%.

● Ether (ETH): 1,327 dollars +2.6%.

● CoinDesk Market Index (CMI): $956 +1.1%.

● S&P 500 daily close: 3,655.04 -1.0%

● Gold: $1,630 per troy ounce -0.9%.

● Daily closing ten-year Treasury yield: 3.88% +0.2

Prices for bitcoin, ether, and gold are taken at around 4 p.m. New York time. Bitcoin is CoinDesk’s Bitcoin Price Index (XBX); Ether is CoinDesk’s Ether Price Index (ETX); gold is the COMEX spot price. Information about CoinDesk indices is available at coindesk.com/indices.

BTC Trades Higher as Traditional Markets Fall

Despite the turmoil in traditional financial markets, bitcoin held up relatively well on Monday. This may interest you: BTC Red Alert: Bitcoin Price Hits 2022 Low, Will $33,000 Hold?. Its resistance is interesting given its tendency to trade in concert with the Nasdaq Composite, which is down 0.8% on Monday.

Traditional financial markets are down on Monday, largely on fears of a global recession. The pound fell to a record low after news that the Bank of England could raise interest rates aggressively.

The Bank of England would join the growing list of central banks that have adopted expansionary monetary policies, including significant interest rate hikes.

BTC still looks decidedly neutral and is essentially trading where it was in mid to late June. The short-term price peak reached in mid-August ($24,000) was followed by a persistent decline to current levels.

The current price level of $19,000 sits around 20% below the August high, which represents something of an opportunity for bullish traders.

Derivatives markets, however, are not signaling much optimism at the moment. As we mentioned in Friday’s Market Snapshot, open interest in options by strike has shown some risk appetite, but even that appears to have diminished as open interest in calls at the strike price of $20,000 decreased.

A call option represents the right but not the obligation to buy an asset at a particular (strike) price. Open interest refers to the number of active contracts that would allow investors to do so.

The open interest ratio of put/call options also moved higher, implying increased bearish sentiment for BTC in the near term.

Technically, there doesn’t seem to be much cause for alarm, but not much celebration either. BTC’s Relative Strength Index (RSI) indicator is 42, which is a neutral reading.

The RSI is a technical indicator that measures the momentum of an asset. Readings above 70 imply that an asset is trading above its fair value, while readings of 30 and below imply the opposite. As things stand, the market considers BTC’s value to be fair.

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Be vigilant and consult your financial adviser before making any investment decision. Mirror-Mag cannot be held responsible in the event of bad investments. Before using any third-party service, you should do your own research.

Thomas E.
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Incredible: Why is the price of Bitcoin (BTC) soaring while traditional markets are falling? – Mag Mirror


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