• Two CryptoQuant analysts have found that Bitcoin’s [BTC] price rally is contingent on its ability to detach from traditional financial markets.
• Pseudonymous analyst Grizzly assessed BTC’s 200-day moving average and its realized price and found a pattern in previous market bottoms.
• Another analyst Baro Virtual noted that a successful hold of the 365-day MA and overcoming resistance range could lead to solid bullish momentum for BTC, but this requires it to decouple from broader financial markets.
Analysts Find Bitcoin’s Price Rally Requires Decoupling from Traditional Markets
Two CryptoQuant analysts have found that Bitcoin’s [BTC] price rally is contingent on its ability to detach from traditional financial markets. Pseudonymous analyst Grizzly identified a pattern previously observed in market bottoms, characterized by the crossing or overlapping of the 200-day moving average and the realized price, as an indicator of long-term growth potential for BTC. Meanwhile, another analyst Baro Virtual noted that a successful hold of the 365-day MA and overcoming resistance range could lead to solid bullish momentum for BTC, but this requires it to decouple from broader financial markets.
Grizzly Assesses BTC’s 200 Day Moving Average
Pseudonymous analyst Grizzly assessed BTC’s 200-day moving average and its realized price, finding a pattern previously observed in market bottoms. This pattern suggests the formation of a long-term bottom, characterized by the crossing or overlapping of the 200-day moving average and the realized price, moving from the top to the bottom. According to Grizzly, if Bitcoin can detach itself from assets such as equities and act as a store of value in these times of high inflation, then it is likely for there to be sustained long-term upward trend following this pattern.
Baro Virtual Analyzes Net Unrealized Profit/Loss Ratio
Another analyst Baro Virtual considered BTC’s Net Unrealized Profit/Loss ratio (NUPL). He found that similar conditions were seen before when NUPL broke its 365 day moving average which ultimately led to strong bullish momentum being experienced by BTC at that time. However after encountering resistance at 0.15 – 025 level NUPL tested its 365 day MA which served as support . For any upward break to happen according Baro Virtual requires Bitcoin’s price has “decouple” itself from traditional macroeconomic indicators .
Federal Reserve Raises Interest Rates
On 1 February 2021 , Federal Reserve raised interest rates by 0.25 percentage point making it smallest rate adjustment since March 2020 . On news of this development both Bitcoin [BTC] & Ethereum [ETH] prices slipped slightly by 0.2 % & 0.3% respectively . It is clear evidence that despite some slight deviation due current market situation , overall cryptocurrency market still remains tightly linked with traditional macroeconomic indicators .
Conclusion
In conclusion , it appears if bitcoin wants sustain positive growth trajectory then there needs be decoupling between cryptocurrency & other traditional macroeconomic indicators for any lasting impact on prices . As we can see even slightest movements in interest rates can affect prices significantly so trading decisions should be made accordingly .