- Bitcoin has now fallen for seven straight weeks, its longest losing streak since August 2011, when few even knew what cryptocurrency was.
- Whereas in the past, crypto traders could ignore economic-data releases like U.S. nonfarm payrolls and inflation data, each of these new data points could change the narrative for Bitcoin and affect price.
Like an airline pilot asleep at the controls, Bitcoin is running on autopilot at the moment as it drifts rudderless, floating between US$29,000 and US$31,000, with nary a catalyst to take the cryptocurrency either way.
Since the collapse of the algorithmic stablecoin TerraUSD that triggered a selloff in cryptocurrencies and wiped out US$1 trillion in market cap, Bitcoin has been adrift, tumbling into the weekend, to recover slightly on Monday in U.S. trading and now sinking again.
Bitcoin has now fallen for seven straight weeks, its longest losing streak since August 2011, when few even knew what cryptocurrency was.
And as Bitcoin has gained more institutional interest, its declines have closely mirrored recent falls in the S&P 500, underscoring how the two asset classes remain closely aligned.
But in recent days, despite a rebound in stocks, especially given that U.S. President Joe Biden has hinted that Washington may lift some of the tariffs the Trump administration imposed on China, Bitcoin has stayed stuck in a quagmire.
Nevertheless, if stocks should take a deep dive, those who had been waiting on the sidelines to go in on Bitcoin could find an excellent buying opportunity.
For many investors who see Bitcoin as a hedge against the debasement of fiat currency, interim volatility doesn’t faze them, as they are looking over the long-term.
But those who intend to add Bitcoin to their portfolio also don’t necessarily want to pay top dollar for the cryptocurrency and so a sharp correction could be exactly the sort of window they have been looking for.
For years, cryptocurrency traders were privileged in being able to ignore macroeconomic conditions or movements in broader financial markets, but recently strong correlations with tech stocks, in particular the tech-heavy Nasdaq 100 index, have meant that traders ignore the broader market at their peril.
Whereas in the past, crypto traders could ignore economic-data releases like U.S. nonfarm payrolls and inflation data, each of these new data points could change the narrative for Bitcoin and affect its price.
