As of press time the largest cryptocurrency was up 1.8% in the past 24 hours, trading at $38,989. Analysts are attributing the price move to bitcoin’s correlation with tech stocks.
“The key story with bitcoin price continues to be its correlation with tech stocks (which is at all-time highs),” said Ben McMillan, CIO at IDX Digital Assets. “As a result, the slate of tech earnings we’ve seen this week have been driving the daily trading in bitcoin. While that’s expected to continue in the near term, we do expect bitcoin’s correlation to tech stocks to come down later this year.”
The markets have been concerned over Federal Reserve rate hikes and a possible recession. However, “earnings reports from many companies such as Microsoft, which released yesterday, were positive and did not support the idea of a recession coming later this year,” said Marcus Sotiriou, analyst at GlobalBlock. “Therefore, I think the market could be reaching oversold levels in the short term.”
“Binance shorts have been getting aggressive near the lows on bitcoin and Ethereum, whilst open interest rises higher and funding falls lower. These indicators add confluence for some upside in the short term as it suggests we could be due for a short squeeze.”
“Despite the recent drawdown, the two top assets by market cap are still showing a strong bottom as the majority of the holders are in profit,” wrote the crypto analysis firm IntoTheBlock in a Telegram message, “58.44% of the addresses holding $BTC and 69.25% of the addresses holding $ETH are in the money or profit.”
Ether (ETH) was up 0.3% in the past 24 hours, trading at $2,860.
U.S. stocks are up after Tuesday’s red ink. The S&P 500 was up 1% and the Nasdaq was up 0.9%.
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