It is official. Bitcoin is tailing the US stock market in pain and gain.
The benchmark cryptocurrency inched higher after opening weakly at the New York opening bell Thursday. It broke above its critical support level of $10,500 with a $100 premium as traders continued to get influenced by the moves in the S&P 500, the Dow Jones, and the Nasdaq Composite.
So it appears, tech stocks listed across all the three Wall Street indexes rose similarly as that of Bitcoin. The gains, however, showed a bias conflict across all the markets. Both Bitcoin and the US stocks fell earlier this week over worries about a long delay in the second coronavirus stimulus package.
They also plunged lower because of the Federal Reserve’s inability to aid the market with extra liquidity. The US central bank’s chair told a Democrat subcommittee that they were waiting for the government to release the financial aid to help small American businesses and households.
Such uncertainty drove investors into the safety of the US dollar – among the only assets that were underbought following months of sell-off. That lifted the appeal of both risk-on and risk-off assets, hurting Bitcoin, in particular.
The intraday bullish bias improved for Bitcoin as investors reevaluated their anticipation of a US economic recovery. Figures released on Thursday showed a rise in the number of first-time unemployment seekers. At the same time, fears of a second wave of coronavirus infections raised further doubts over the good health of the US economy ahead.
More Choppy Bitcoin Price Moves Ahead
Traders also increased their exposure in the Bitcoin market because the cryptocurrency was too cheap, intraday-wise. It was trading about 20 percent below its year-to-date high, had plentiful fundamentals to sustain its bullish bias long-term, and therefore offered a good day-trading opportunity.
But anything can happen in the sessions ahead. Fundamentally, the US dollar was looking like an attractive hedge for serious investors as long as the US Congress delays the coronavirus relief. That would keep haunting Bitcoin bulls at local tops, be it near $10,700, $11,000, or above.
Technically, as well, Bitcoin looked ready to face bears upon attempting new bullish moves. Look at what market analyst Josh Olszewicz has to say in the tweet below.
1D $BTC
still inside of Cloud aka anything goes within the range
entries im watching:
above green blob? long
below green blob? short pic.twitter.com/pylfg2acRd— #333kByJuly2025 (@CarpeNoctom) September 24, 2020
Tony Yarrow, a multiasset fund manager at Wise Funds, said that “the mood among investors is extremely pessimistic at the moment” thanks to a lack of stimulus deal. That could further increase the bearish pressure on Bitcoin in the sessions ahead.