The recent falls in the crypto space has left many traders reeling. Alternative coins collapsed around a wider market sell off as high inflation has prompted central banks to enter steep hiking cycles. This in turn has led to worries over slowing growth that can potentially lead to a global recession. Industrial and base metals collapsed even as energy prices remain high. So, what are some tips for managing Bitcoin’s prices? Although wider questions remain about BTC’s viability, it does seem to be more part of the financial tapestry than it was 18 months ago. Well, it appears at this stage to be really quite straightforward to see where BTC prices might be headed next.

Bitcoin track stock prices

Take a look at the chart below which overlays Bitcoin prices and the Nasdaq. You will notice that BTC price and Nasdaq prices are moving in tandem.

Chart

Why is this correlation so tight? The best explanation is likely to be that BTC is now grouped with tech stock for risk management. So, when risk dictates sell tech, then BTC gets sold too. Remember that many BTC investors are large whales holding many, many coins.

So, what’s the trade?

Well, this means that BTC should recover alongside stocks. When will stocks recover? That will most likely be the moment that the Federal Reserve indicates that it will be pausing/stopping its rate hiking cycle. So, if you are wondering what the next path for BTC will be, then watching the Nasdaq may prove to be a reliable guide as long as this close correlation remains and there is no obvious reason why that relationship should break down. See here for another article I wrote back in December 2021 with the close correlation then between the VIX and BTC.


Learn more about HYCM


Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Solana and XRP ETFs may be on the cards in 2025, Standard Chartered analyst says

Solana and XRP ETFs may be on the cards in 2025, Standard Chartered analyst says

Ethereum Exchange Traded Fund approval news has renewed optimism on Solana and XRP ETFs approval in 2025. Analysts at Standard Chartered believe more cryptocurrency ETFs may be approved next year, and these assets will not be classified as securities. 

More Solana News

Uniswap Price Forecast: UNI could be poised for 30% rally after month-long lull

Uniswap Price Forecast: UNI could be poised for 30% rally after month-long lull

Uniswap price has broken out of a 35-day consolidation this week, a sign of a possible rally ahead that could increase the token’s price around 30%. Technical indicators support the bullish thesis, while on-chain data also aligns with it.

More Uniswap News

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Dogecoin inspiration Kabosu dies, leaving legacy of $22.86 billion market cap meme coin behind

Kabosu, the popular Shiba Inu dog that inspired the logo of the largest meme coin by market capitalization, Dogecoin, died early on Friday after losing her fight to leukemia and liver disease. Kabosu had gained popularity as the dog behind the viral “doge” meme. 

More Dogecoin News

XRP climbs past $0.53, SEC Chair Gensler says the agency has done very well in court cases

XRP climbs past $0.53, SEC Chair Gensler says the agency has done very well in court cases

Ripple lawsuit ruling is expected soon, following the new US crypto bill, FIT21. SEC Chair Gary Gensler says the agency has fared well in legal battles while speaking at the ICI 2024 Leadership Summit. 

More Ripple News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis

BTC

ETH

XRP