The Nasdaq, an index that mainly represents technology stocks such as Amazon, Microsoft and Alphabet, has surpassed 10,000 points to reach a new record, the movement above 10,000 points effectively erased all losses suffered by the coronavirus pandemic, however, the price of Bitcoin (BTC) remains 50% below its record of $19,665.
Bitcoin apparently correlated with the U.S. stock market during March, but now the digital asset is experiencing a decline in momentum after a 167% increase in price in three months.
The upward trend and the V-shaped recovery of the U.S. markets also show that the appetite for high-risk assets and individual stocks is increasing, Bitcoin’s struggle to demonstrate a similar trend could be a clue that a reversal is still pending.
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The United States stock market has experienced a strong upward trend due to the reopening of the economy, the improvement in the labour market and the growing belief that the pandemic is beginning to subside.
Bitcoin’s label as a value-preserving asset and its proven ability to withstand today’s global macro challenges has made it a growing point of interest to Wall Street Barons and multi-billion dollar investors looking for inflation coverage.
Currently, crypto-currencies are in an uncomfortable position as retail investors lead a FOMO-driven recovery in the stock market, while institutional investors seek the security of cash and bonds.
The source of demand for Bitcoin today remains unclear, as the stock market is generating large returns for retail investors, and as such, these investors perceive stocks as a more attractive asset class.
Many investors are still waiting to see if Bitcoin will make a strong recovery now that the reduction in the block reward is over, but currently, the mediocre volume in the spot and futures market, shows that a huge increase is unlikely.
Technically, the Bitcoin daily chart indicates that stability in the $9,100 to $9,300 range can build a solid foundation for a new run in the short to medium term.