Most Bitcoin (BTC) traders would rather see a sharp price correction and a subsequent recovery than agonize for multiple months below $24,000. However, BTC has been doing the opposite since June 14 and its most recent struggle is the asset’s failure to break above the $22,000 resistance. For this reason, most traders are holding back their bullish expectations until BTC posts a daily close above $24,000.
Events outside of the crypto market are the primary factor impacting investors' perspectives on digital assets and on July 14, United States Treasury Secretary Janet Yellen warned that inflation is "unacceptably high" and she reinforced the support of the Federal Reserve’s efforts. When questioned about the impact of rising interest rates on the economy, Yellen recognized the risk of a recession.
On the same day, JPMorgan Chase reported a 28% decline in profits versus the previous year despite recording stable revenues. The difference comes chiefly from a $1.1 billion provision for credit losses because of a "modest deterioration" in its economic outlook.
Bitcoin’s correlation to the S&P 500 remains incredibly high and investors fear that a potential crisis in the global financial sector will inevitably lead to a retest of the $17,600 low from June 18.
The correlation metric ranges from a negative 1, meaning select markets move in opposite directions, to a positive 1, which reflects a perfect and symmetrical movement. A disparity or a lack of relationship between the two assets would be represented by 0.
The S&P 500 and Bitcoin 30-day correlation presently stands at 0.87, which has been the norm for the past four months.
Bitcoin's failure to break above $22,000 on July 8 took bulls by surprise because only 2% of the call (buy)
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