The last two months have been a tough period for Bitcoin investors, with the cryptocurrency falling from about $ 45,800 to $ 28,800, corresponding to a decline of 40 percent.
“There is no doubt that the strong correlation between cryptocurrencies and other risk assets has broken down recently. While tech stocks in the US are rising after weeks of decline, digital assets have largely stayed on the sidelines “, says analyst Fiona Cincotta in the City Index according to Bloomberg.
The technology-heavy Nasdaq stock exchange in the US marked the third day in a row with a rise on Friday, while Bitcoin has fallen over 2 percent in the last three days.
Bloomberg points out that recent developments may mark a break in the correlation between equities and Bitcoin, and points to this as a sign of less conviction, which in turn is described as a worrying trend.
“I do not think this marks the end of the positive correlation between Bitcoin and Nasdaq, but there is a concern that Bitcoin only follows Nasdaq when it falls,” says Cincotta.
She does not think it is unlikely that Bitcoin will fall below 28,000 dollars, but emphasizes that it would be a remarkable event that could test the year-end bottom of 25,425 dollars.
If Bitcoin goes down, $ 20,000 will be the next psychological level that comes into play, she continues.
On the other hand, she believes that if the price goes above 31,500 dollars, it could be a sign that the price is about to break up.
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