Equity market upside could favor Bitcoin as correlation with Nasdaq 100 strengthens
Despite the possibility of further upside for Bitcoin in the tailwind of the equity market, this might not be the parabolic upward movement the market expects.
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Bitcoin’s (BTC) 30-day correlation with the Nasdaq 100 Index of US technology stocks is nearing its highest level since early 2023, as reported by Bloomberg. This means that further gains in the index might be followed by a similar upward movement performed by BTC.
Additionally, Mike Novogratz stated on Bloomberg Television that a “more positive US political environment for digital assets” might propel BTC to $100,000 by the end of the year.
However, if Bitcoin is ready to start its path to Novogratz’s prediction, following further upside from Nasdaq 100, is yet to be defined by the weekly close. The trader identified as Rekt Capital has been pointing out that BTC is stuck within an accumulation range between $68,000 and $71,000 since the halving on April 20th.
Moreover, the trader explains that past cycles suggest that there are just two phases left for Bitcoin in this cycle: the current accumulation phase and the parabolic upward movement phase. In a recent video, Rekt Capital highlighted that Bitcoin must escape this range with a convincing weekly close.
By the end of this week, we'll probably find out if Bitcoin is ready to breakout into the Parabolic Phase of the cycle$BTC #Crypto #Bitcoin
— Rekt Capital (@rektcapital) June 5, 2024
Nevertheless, even if BTC manages to break this range in the weekly timeframe, there’s still the possibility of it being trapped in another accumulation channel.
“Are we on the cusp of a breakout? History suggests it is too soon for that to happen, and the only confirmation that we really need at this point is a weekly close above over here [$71,000 price level],” highlighted the trader.
Therefore, even if Bitcoin manages to follow a potential upside from the tech equity market after staying above the current range resistance, it might not be enough to start the run to $100,000 suggested by Novogratz right now.
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