A closely-watched analyst assesses how the stock market will affect Bitcoin’s price in the future as the leading cryptocurrency begins to break correlation with the global market.

In a new strategy session, Benjamin Cowen to speak that while he expects the stock market to have a significant impact on BTC prices, he highlights a recent development that is working well for the crypto king.

“One of the things that I think will likely, to some extent, dictate the next move for crypto is the stock market. What are S&P and Nasdaq doing? What is interesting to me is that Nasdaq is making a lower low but Bitcoin is not.

I think this is looking pretty good for bitcoin.”

Source: Benjamin Cowen

According to Cowen, traders should monitor Bitcoin’s performance against a bull market support band as it could signal altcoins to slowly move higher.

BTC’s bull market support band is currently hovering around $47,000. At the time of writing, Bitcoin is trading at $43,685.

“The reason I’m interested in support bands is because we know altcoin markets behave differently when they’re above or below. It doesn’t matter where it is, how it looks.

When Bitcoin surged above it in the summer of 2020, many people made big bucks. We’ve watched all the altcoins go haywire.

People are still making a lot of money even though bitcoin is only $10,000. Why? Because it is above the bull market support band. When it’s below that level, not many altcoins are strong.”

Taking a closer look at the correlation between Bitcoin and the stock market, Cowen splits BTC by Nasdaq. Based on his analysis, Cowen expects BTC to consistently outperform the Nasdaq in the coming weeks.

The analyst will continue to keep a close eye on Bitcoin’s bull market support band. This technical indicator consists of BTC’s 20-week simple moving average (SMA) and a 21-week exponential moving average (EMA).

Bitcoin bulls are gaining momentum

According to analyst Cred, the bullish case for Bitcoin is gaining momentum amid heavy action and the cryptocurrency is becoming “serious money” following geopolitical developments.

In the latest TechnicalRoundup newsletter, Cred said that Bitcoin regaining $40,000 bodes well for the top cryptocurrency by technical market cap structure.

“In terms of technical indicators, the market is approaching resistance in the mid-$40,000 region on multiple periods. $46,000-47,000 is a crucial line on the weekly chart. There are some positive signs in this regard. First, the move into the resistance area comes after a higher low. Second, this is the third test of this resistance in a relatively short period of time. In general, the more times a barrier is tested from the same direction, the weaker it becomes.”

Cred says Bitcoin’s recent surge into the $45,000 region was one of the biggest daily gains of the month, showing that resistance below $50,000 is fading after multiple retests.

“There are some signs that resistance is fading. A more sustained momentum/trend trigger price above $47,000 on a higher time frame basis. Deep pullback moves (below $40,000) could be bearish.”

The analyst adds that geopolitical developments in Eastern Europe are creating opportunities for digital assets to showcase their use cases. According to Cred, cryptocurrencies are officially “major money”, but also warned that increased attention and surveillance of the space could lead to more regulation.

“First, crypto is undoubtedly an important currency. Aside from some institutions in the US buying it for their balance sheets if you want to apply for it what would it look like? Welcome to the big leagues.

Second, this will likely speed up regulation. Just as mandatory KYC became the industry standard almost overnight, it is likely that in the near future we will see limited withdrawals from centralized exchanges, restrictions on wallets that have implemented KYC, and whitelisted wallets. In our view, the premise that individuals use cryptocurrencies to avoid sanctions will soon come into view.

Ultimately, these geopolitical events are both bullish and bearish. Or at least a double-edged sword. Ukraine is accepting crypto donations to wage a defensive war. This is considered a net positive. At the same time, there is speculation that Russian oligarchs (and possibly government agencies) will use cryptocurrencies to circumvent sanctions. This is considered a net negative. Will they cancel each other out?”.

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Minh Anh

According to AZCoin News

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