Presenting Qlusters' US100 + BTC! Starcrossed Lovers? Technical Outlook, Edition #215 (24/05/2022)
A pair of star-crossed lovers? How did this Shakespearean romance come about? What does fate and the markets have in store for these lovers? Read on and find out 👇
Qluster Research is a reader-supported publication. To receive new posts and support our work, consider becoming a free or paid subscriber.
As Bitcoin flatlines at the .618 Fib retrace level around USD 28.7K after selling down for eight consecutive weeks. The question on everyone’s mind - Will there be a ninth week?
Bitcoin vs. US Dollar, $BTC - Weekly (W1)
The odds of falling lower to USD 21K or bouncing up to USD 36K are 50/50.
Let's see why.
The answer lies in the term 'correlation'.
Historically the price of BTC/USD is most correlated with the US Tech index, formally known as the Nasdaq (US100).
How correlated, may you ask?
One could even say they are entwined. According to Bloomberg data, the 40-day correlation between the Nasdaq 100 index and Bitcoin reached an all-time high of 0.6945 on April 8.
Ergo, whichever direction the US100 decides to take, then BTC/USD has a 69.45% mirroring its movements.
With that in mind, the eager practitioner (in theory) should be reluctant to trade Bitcoin until the Nasdaq reveals its following path.
And for digital assets like cryptocurrency, we're only just getting started 👇
US100 Index, US100 - Weekly (W1)
The Technicals here reveal that Nasdaq is clinging to the .5 Fib retrace level, similarly to how Bitcoin is at the .618.
There are many things that one could call a coincidence.
This phenomenon is NOT one of them.
Both lie at critical levels of support. Many speculators would be expecting some form of a bounce here; however, without confirmation of the US100 doing the same, trading BTC/USD is nothing short of ludicrous...
US100 Index, US100 - Daily (D1)
Bitcoin vs. US Dollar, $BTC - Daily (D1)
Well done! You’ve almost made it to the conclusion so help us share this research before reading on 👇
Bitcoin will follow the Nasdaq, although whether it ascends to its previously lofty heights or descends further into the depths depends on what happens to the US100 trading pair.
If Nasdaq returns to the .382 of 12,9XX index points, then BTC/USD by that standard will see USD 36K.
Vice versa, if the US100 continues to plummet from grace, BTC/USD is at risk of returning to the USD 25K lows.
One must also note that 0.6945 correlation between the US100 and the BTC/USD is astronomically high.
The prudent trader must now think to themselves, if Bitcoin flatlines, will the next pulse be up or down?
See you again for the next update.
We’re on a mission to a Brand New World.
It’s a place where people come to share in the wonderful gifts of trading. Where individuals come to qluster their knowledge, united by a shared love for learning.
This is Trading Made Social. Help us on our mission by sharing the gift of Trading Made Social to new explorers.
Join our Facebook group and connect with likeminded traders 🚀
Like and Follow our Facebook page for activity updates 📣
Connect with us on LinkedIn for future updates 🤝
The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions