The correlation between BTC and the S&P 500 Index has eased recently
The bitcoin price has been trading in a tightening range these days, with bearish bias dominating the crypto market after rejection from mid-June highs seen around $24,600 last week. BTCUSD finished below $23,000 on Wednesday, clinging to this figure today. The prices struggle for direction as the overall risk sentiment has improved somehow, but the overall upside potential in the cryptocurrency market remains limited.
The digital currency continues to monitor developments in the traditional financial markets, moving in tandem with the S&P 500 Index. However, the correlation has eased recently as the US benchmark continues the ascent these days, holding above the 4,000 figure, while BTC lacks recovery momentum.
In part, this is due to some negative industry news in the crypto space. Nomad said earlier this week that it is investigating an “incident involving the Nomad token bridge” – around $190 million worth of users’ cryptocurrencies were stolen as a result of the attack. Meanwhile, the US SEC said that it has charged 11 people for creating and promoting a fraudulent crypto pyramid and Ponzi scheme.
As such, bitcoin struggles and could stay on the defensive in the longer term as well amid further tightening in central banks’ monetary policy and persistent recession fears amid worsening economic updates. Furthermore, both online activity remains subdued while on-chain indicator data has not improved substantially in recent days, suggesting BTC will likely struggle to resume its recovery rally in the near term as little new demand is coming in.
On the downside, the immediate support now arrives at $22,600, followed by the $22,000 figure. Failure to regain the $23,000 mark on a daily closing basis would signal some further deterioration in the immediate technical picture.