New data from IntoTheBlock shows Bitcoin (BTC) showing relative strength against the stock market amid declining macroeconomic conditions.
In a new article, Lucas Outumuro, head of research at the analytics company, says: say that the crypto king’s price action last week was “remarkable” as the stock market plummeted.
“As expected, the Federal Reserve did not raise interest rates this week. However, via their scatter plot, they forecast another increase this year and only two cuts by the end of 2024, demonstrating their commitment to the higher, longer mantra.
This pushed ten-year yields to their highest level since 2007, putting pressure on markets. The Nasdaq and S&P 500 are down 3.3% and 2.7%, respectively, so far this week. Still, Bitcoin has shown relative strength, managing to hold the same price of $26,600 as last week and outperforming over the past 30 days.”
Outumuro further explains why the top crypto assets have remained stable in terms of market capitalization despite difficult macro conditions. According to the analyst, there are three factors that contribute to Bitcoin’s relatively stable price.
“Some key points that may explain Bitcoin’s stable price:
- Bitcoin’s correlation with the dollar has reached zero, putting it in a strong position despite the rally of the DXY (US dollar index).
- The passing of the Bitcoin ETF (exchange-traded fund) remains a positive catalyst on the horizon, making holders hesitant to pre-sell.
- Mt Gox’s refund, where they plan to send 850,000 BTC ($23 billion) to users affected by their hack, was postponed by a year, easing the selling pressure expected if they had started redistributions next month , as previously planned.
The analyst also highlights that Hodlers, or entities that have kept their BTC dormant for more than a year, now hold a near-record high of 13.44 million BTC, representing about 69% of the available supply.
“Overall, this trend appears to be a signal that a bullish cycle for Bitcoin is underway. While it is unclear how long Bitcoin’s outperformance will last in a deteriorating macro environment, on-chain data shows that long-term investors will continue to accumulate regardless.”
Bitcoin is trading at $26,109 at the time of writing.
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Featured image: Shutterstock/Tithi Luadthong