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The Bitcoin price flushed through the major $30k lows and now the price is heading towards the $20k highs, is the decline over here?
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Bitcoin Analysis
The price of the largest digital currency has fallen aggressively since the market reached the major highs at $65k. This coincided with the decline in the stock markets, which brings us onto the correlation between the S&P500 and Bitcoin. The chart highlights the correlation between the two markets, this means that one market will affect the other. In this case the S&P500 will affect the price of Bitcoin, recently we have seen the stock market decline due to multiple factors but noticeably the recent rate hikes from the Federal Reserve. This is down to the rising inflation rate in the US which recent data has shown hasn’t slowed down. The Federal Reserve needs to try to bring demand down in the market and could raise rates more aggressively in the near future. This could have a negative effect and could see the market move much lower.
Observing the price of Bitcoin we can see the price has broken through the major support around the $30k level. This correlated with the breakout lower on the S&P500 after the recent inflation data. Now the price is moving lower we could expect to see a continuation to a previous support level, the $20k level was a previous area of resistance for the market and would be an area the market would want to test.
If the stock market continues to decline further we could expect the price of Bitcoin to end up at the $10k level, this would be a retest of the trendline support after the initial breakout.
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