Analysts caution that it is still too soon to tell if the Bitcoin trend will continue.
“We’re not quite there yet, but if Bitcoin holds strength through the upcoming CPI, as well as ongoing Powell-related and equity earnings volatility, the decoupling narrative could evolve from “Temporary divergence” to “Regime change” Bitfinex analysts said in an April 23 markets note viewed by Cointelegraph.
Bitcoin’s relative strength yet to be proven as structural
The analysts said that while Bitcoin’s (BTC) relative strength against US equities “The appearance of the real thing” it is yet to be confirmed as structural. The analysts warned that Bitcoin has previously seen short periods of outperformance, only to eventually fall back in line with the broader market.
Cointelegraph recently reported that Bitcoin is increasingly abandoning its stock correlation to copy gold’s upside. At the time of publication, Bitcoin’s price has posted gains of 7.68% over the past 30 days. Meanwhile, the S&P 500 and the Nasdaq are down 6.79% and 8.14%, respectively, as per Google Finance data.
Nvidia, which is also a semiconductor company (NVDA), has experienced a similar growth rate. outperformed Bitcoin over the past decade, fell 15.4%. Analysts attributed this decline to “the effective ban on advanced chips exports to China, and tariff-driven volatile prices.”” In May 2024, Swan Bitcoin CEO Cory Klippsten said there is a “Nvidia has a very low chance to outperform Bitcoin in the next 10 year period.”
The Bitfinex analysts described the current crypto market as a “”Hybrid state”, with an increase in macroeconomic risks on one hand and an increase in inflows into spot Bitcoin ETFs.
The 22nd of April alone brought $913 millions. in spot Bitcoin ETF inflowsIt is the biggest since late January.
Bitcoins are favored by this backdrop “cleanest shirt in the dirty laundry.”
This reinforces Bitcoin’s strong position as an asset store, and the Bitcoin dominance has risen to levels that have not been seen since 2021.
Bitcoin’s dominance at the time of publishing was 64.49 %. according TradingView is a source of data.
Related: Bitcoin holders back in profit as new capital enters the market — Is $100K BTC price next?
The Consumer Price Index for April will be released on May 13th. After March’s data, which showed a trend of cooling that many saw as unfavorable to crypto traders. short-term bearish signal for Bitcoin.
According to the US Bureau of Statistics, March’s CPI was 2.4% over the previous year, down from the 2.8% recorded in February. This is the lowest CPI level since February of 2023.
Some crypto analysts warn that Bitcoin’s recent rally could not continue.
10x Research head of research Markus Thielen said, “Given that our stablecoin minting indicator has yet to return to high-activity levels, we remain cautious about the sustainability of the current Bitcoin rally.”
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Source: cointelegraph.com
