After bleeding for several months now, the cryptocurrency space is now recovering and heaving a sigh of relief. Bitcoin price, which was hovering below $22k during the bear market, has now been maintaining its price range above $23,000 since mid-July.
However, investors appear to be in a dilemma: Is this recovery a sign of a strong trend reversal or just another bull trap?
The recent reports from Bloomberg reveal that Bitcoin investors are leaning towards the U.S. stock market performance to understand the crypto market, as in July, the BTC price jumped by 15% along with the stock market.
According to a Bloomberg survey, Bitcoin’s 90-day correlation coefficient and the S&P 500 have hit 0.65, which is the highest reading since 2010. A reading of 1 or above would indicate a significantly high correlation between Bitcoin and the stock market. However, if the reading says -1 it means that both are moving opposite to each other.
Meanwhile, Mike McGlone, Bloomberg analyst, believes that there are high chances that if the stock market drops, then cryptocurrencies will surpass them.
Bitcoin Active Address & On-Chain Transaction Fee Plunge
Additionally, Glassnode has disclosed that Bitcoin’s price surge has failed to influence the currency’s network demand as there are still only a small number of traders and investors that are ready to make a stronger commitment, no matter the market disturbances.
On the other hand, Bitcoin’s active addresses are lesser than the pre-suggested downward range. Even the on-chain transaction fees have seen a downfall; any surge from this point will confirm a recovery phase.
An analyst at Glassnode says that the 2022 bear market has been one of the worst ones in crypto history. Hence, after cryptocurrencies have experienced such a pullback, one needs to think: Is this a bull recovery rally, or are the bears merely ‘taking a break’?
There was some market advancement for Bitcoin and cryptocurrencies during the past week. The biggest wealth manager in the world, BlackRock, formed a partnership with cryptocurrency exchange Coinbase to introduce its professional customers to cryptocurrency.