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Name Symbol Market Market Cap ($) Algorithm
Bitcoin BTCUSD Crypto 442,729,099,676 SHA-256d
  Price Change Price Change % Current Price Bid Price Offer
  -48.18 -0.21% 22,969.51 22,968.52 22,969.65
High Price Low Price Open Price Prev. Close 52 Week Range
23,105.23 22,540.76 23,008.84 23,017.69 15,500.00 - 48,240.00
Exchange Last Trade Size Trade Price Currency
GDAX 09:10:50 0.005875 22,969.51 USD
Price x Volume Volume Base Symbol Related Pairs
262,818,870.36 11,484.97 BTC BTCEUR BTCGBP ETHBTC

Why “Rosy” Earnings Estimates Might Hurt Bitcoin As Price Struggles At $20,000

06/10/2022 8:41pm

NEWSBTC


Bitcoin continues to lose momentum on low timeframes, as bulls were unable to follow through on yesterday’s upside impulse. The cryptocurrency was rejected around the mid-area of its current levels and might be bound for a fresh re-test of local support. Related Reading: All Signs Prove Shiba Inu Is Ready For A Run; Here Is Why? At the time of writing, Bitcoin price trades at $20,000 with a 1% loss and a 3% profit in the last 24 hours and 7 days, respectively. Despite its negative price performance, BTC remains relatively strong when compared with other cryptocurrencies in the top 10 by market cap. Bitcoin At Record Correlation With Gold And Equities In 2022 Data from Kraken Intelligence shows that Bitcoin has been increasing its correlation with risk-on assets, and with other traditional assets in the legacy financial market. This phenomenon has been common across 2022, as global markets move in tandem reacting to the U.S. Federal Reserve (Fed). The financial institution has been trying to slow down inflation in the U.S. dollar by hiking interest rates. This has brought negative consequences across all assets class. As seen in the charts below, the price of Bitcoin saw a decline in its correlation with major equities indexes, the Nasdaq 100 and S&P 500. In the past months, this correlation stood at its low below 0.5 but is re-approaching high correlation levels at around 0.8 and 0.74, respectively. Something similar is happening with Gold and U.S. Treasuries. Unlike stocks, Bitcoin has been less correlated to the precious metal and U.S. Treasuries, but that appears to be changing in light of the increase in economic uncertainty. Earnings Seasons Might Cap Bitcoin Bullish Momentum This data suggest that Bitcoin might be more and more susceptible to events related to stock and major indices. Jurrien Timmer, Director of Macro for Investment firm Fidelity, believes the upcoming earnings season might bring hurdles for traditional assets. Timmer supports his theory on the recent rally in the U.S. Dollar, as measured by the DXY Index. This tool allows market participants to get a sense of the strength of the dollar compared mostly to the Japanese Yen, the British pound, and the Euro. We see the same disconnect in the chart below, when comparing the dollar’s rate of change to the expected EPS growth rate (NTM divided by LTM). Estimates should be coming down faster, it seems. /4 pic.twitter.com/G49jAMu0Y0 — Jurrien Timmer (@TimmerFidelity) October 6, 2022  Related Reading: Calm Before The Storm? Bitcoin Volatility At Historically Low Levels The higher the DXY Index, the weaker these other currencies, and other risk-on assets by extension, such as Bitcoin. Timmer claims that 40% of the S&P revenue comes from abroad which could lead to a noticeable negative impact on profit margins and U.S. companies’ earnings. The expert wrote: Expectations are for revenue growth to fall to 4% and stay there. Given that the DXY’s rate of change is +19%, that seems too high. So, based on the dollar and market breadth, we might get some negative earnings surprises.

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