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- Correlation between Cryptocurrencies and Stocks Strengthens
- New “buyers” appear: experts
In a recent article Bloomberg reported that Bitcoin’s rally today to $38,000 in Hong Kong is correlated with the growth of US futures. The second event comes before the upcoming meeting of the Federal Reserve.
So far, the leading cryptocurrency has returned to its highest level since January of last year. Currently, Bitcoin is 50% below the all-time high broken in November, when Bitcoin almost hit the $69,000 price mark.
Now, analysts believe that $30,000 will be the next level of support for Bitcoin.
NEW: Bitcoin rallies near $38,000, along with US equity futures ahead of key Fed Reserve decision that will shape monetary tightening expectations https://t.co/TcY4JptMOy
– Bloomberg Crypto (@crypto) January 26, 2022
Correlation between Cryptocurrencies and Stocks Strengthens
Experts have been pointing to a high correlation between Bitcoin and stocks for some time now. As reported by U.Today, the most recent analyst to do this was Mike McGlone, chief commodity strategist at Bloomberg, who posted a chart to illustrate this where Bitcoin is moving in par with S&P 500 index.
Earlier, CNBC’s Brian Kelly spoke of the strong correlation between Bitcoin and the Nasdaq 100, saying that they could bottom out as early as 2022.
In response to the Fed’s likely tightening of monetary policy, investors have begun shedding expensive tech and crypto stocks.
New “buyers” appear: experts
On Wednesday, the Fed will wrap up its two-day meeting and shortly thereafter, Chairman Powell will make a policy decision regarding interest rates. Anna Wong, Bloomberg economist, believes that the Fed will keep interest rates steady and speed up the gradual decline, promising a rate hike in March of this year.
Todd Morakis, a co-founder of JST Capital, expects investors to buy more coins when prices are falling.
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