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

Name	Symbol	Market	Market Cap ($)	Algorithm
TRON	TRXUSD	Crypto	10,638,139,746	Not Mineable

Name

Symbol

Market

Market Cap ($)

Algorithm

TRON

TRXUSD

Crypto

10,638,139,746

Not Mineable

	Price Change	Price Change %	Current Price	Bid Price	Offer
	-0.001401	-1.15%	0.120911	0.120858	0.120895

Price Change

Price Change %

Current Price

Bid Price

Offer

-0.001401

-1.15%

0.120911

0.120858

0.120895

High Price	Low Price	Open Price	Prev. Close	52 Week Range
0.122312	0.120753	0.122312	0.122312	0.064588 - 0.144371

High Price

Low Price

Open Price

Prev. Close

52 Week Range

0.122312

0.120753

0.122312

0.064588 - 0.144371

Exchange	Last Trade	Size	Trade Price	Currency
KRKN	22:36:38	631.18	0.120911	USD

Exchange

Last Trade

Size

Trade Price

Currency

KRKN

22:36:38

631.18

0.120911

USD

Price x Volume	Volume	Base Symbol	Related Pairs
80,088.53	660,740.54	TRX	TRXEUR	TRXGBP	TRXBTC

Price x Volume

Volume

Base Symbol

Related Pairs

80,088.53

660,740.54

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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