Bitcoin surged to a high of $61.2K today, coinciding with a bounce in the S&P 500. While it’s debated whether crypto is leading the equities market or the other way around, the strong correlation between the two is undeniable.
Historically, Bitcoin tends to break out when its correlation with equities diminishes, suggesting that the current tight relationship might eventually loosen.
📊 Bitcoin has rebounded as high as $61.2K today as the S&P 500 is also bouncing. Whether crypto is leading equities, or vice versa, is up for debate. But it is clear that the correlation is tight between the sectors. Historically, BTC tends to break out when no reliance exists. pic.twitter.com/7trILqSQzy
— Santiment (@santimentfeed) August 29, 2024
A key indicator of Bitcoin’s resilience is the fact that 30.7% of the total supply has remained untouched for over five years, according to UTXO analysis. This data highlights the long-term confidence of Bitcoin holders, even amidst market volatility.
However, caution is advised as the TD Sequential indicator has flashed a sell signal on Bitcoin’s hourly chart, hinting at a possible price correction.
The TD Sequential presents a sell signal on the #Bitcoin $BTC hourly chart, anticipating a price correction! pic.twitter.com/wTGxlMZtb2
— Ali (@ali_charts) August 29, 2024
This warning comes after Bitcoin experienced two significant crashes in August, reminding investors of the inherent risks in the market.
1/ The price of #Bitcoin experienced two major crashes in August!
Will it keep dropping or bounce back from the bottom?
Let’s use 5 indicators to decide whether to escape from the #Bitcoin top. pic.twitter.com/C3DjDzFWCx
— Lookonchain (@lookonchain) August 29, 2024
For those looking at long-term trends, the Rainbow Chart offers some optimism. This logarithmic growth curve tool suggests that Bitcoin is still undervalued, with plenty of room for growth. Similarly, the Relative Strength Index (RSI), currently at 61.87, indicates that Bitcoin has not yet reached its peak, as it remains below the overbought threshold of 70.
Additional metrics, like the 200 Week Moving Average Heatmap and the Cumulative Value Coin Days Destroyed (CVDD), further reinforce the idea that Bitcoin’s top is yet to be reached. Both indicators suggest that the current price level is still in a buying zone.
Despite these positive signals, the market faced some challenges, with a total net outflow of $105 million from Bitcoin spot ETFs on August 28. Grayscale’s ETFs and ARKB were among those seeing significant outflows, highlighting the market’s ongoing uncertainty.
On August 28, the total net outflow of Bitcoin spot ETFs was $105 million. Grayscale ETF GBTC outflowed $7.9796 million, Grayscale mini ETF BTC outflowed $8.7716 million, and ARKB outflowed $59.27 million. https://t.co/59u0BnEqLG
— Wu Blockchain (@WuBlockchain) August 29, 2024
In summary, while Bitcoin’s recent rebound is encouraging, investors should remain vigilant of potential corrections while keeping an eye on long-term indicators that suggest continued growth potential.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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