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In this episode of NewsBTC’s daily technical analysis videos, we compare Bitcoin price with the S&P 500, WTI Crude Oil, Gold, and the almighty dollar through the DXY.
Take a look at the video below:
VIDEO: Bitcoin Price Analysis (BTCUSD): October 4, 2022
Bitcoin price is back over $20,000 and you can finally feel the sentiment starting to change. The change is happening all across the rest of finance, and not just crypto, which is the focal point of this video.
Stock Market Correlation With Crypto Continues
To start, comparing the S&P 500 against Bitcoin, shows that Bitcoin tends to top out prior to the stock market. Importantly, BTC and the SPX have been more tightly correlated than in the past.
This is notable because along with Bitcoin, US stock indices have turned sharply up. Both asset classes are down considerably from all-time highs, so this is nothing yet to celebrate.
Bitcoin tops well ahead of the SPX | Source: BTCUSD on TradingView.com
Oil Slips Slightly After BTC, But Turning Up Sharply
In yet another macro comparison with WTI Crude Oil, we can see that oil tends to trail crypto and stocks slightly.
Oil prices tend to fall even more sharply than crypto during corrections, but are fewer and further between. Oil prices are also turning up sharply at the same time as Bitcoin and the stock market.
Oil bounce harder from Black Thursday than BTC | Source: BTCUSD on TradingView.com
Related Reading: Bitcoin And The Golden Ratio Bottom | BTCUSD Analysis September 29, 2022
Will The Digital Gold Narrative Return?
Comparing gold against the top cryptocurrency by market cap, we can see that the bullish impulse that began in 2019 in gold kept running far beyond what Bitcoin was capable of. Despite this, this was the birth of the digital gold narrative, as trade tensions between the US and China increased under the Trump administration.
With currencies beginning to fall apart across the globe, gold is also suddenly rebounding alongside stocks, oil, Bitcoin, and other assets.
Has Bitcoin bottomed at the cost of production? | Source: BTCUSD on TradingView.com
Bitcoin Versus The Dollar Gets Interesting
If the value of all assets priced in USD suddenly are surging all at once, it probably has more to do with the strength of the dollar side of each trading pair. As the global reserve currency, all other assets are quoted in the dollar as a standard measure.
The dollar is retreating after its most overextended rally in years. Other currencies have been plummeting against the USD side of the trade, but central bankers have stepped in to save their currencies and it possibly prompted a reversal in the dollar.
The UN has also stepped in asking the Fed to help calm the volatility in markets and bring relief to the rest of the world.
When comparing the DXY with crypto, bull market peaks in Bitcoin coincide with the DXY beginning to rise. The recent downtrend in Bitcoin was brought about by one of the most vertical uptrends in DXY history.
The move was similar in strength and length as the move in the dollar that caused the 2014 and 2015 bear market in Bitcoin. After another failed attempt at new highs, the DXY was rejected. The two events lead to what was possibly the greatest cryptocurrency uptrend in history, and was what made Bitcoin a household name.
What happens this time? And is it all starting now?
Will Bitcoin have another incredible rally? | Source: BTCUSD on TradingView.com
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— Tony “The Bull” Spilotro (@tonyspilotroBTC) September 28, 2022
Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com