Bitcoin price has been moving in tandem with the US stock market in past months. However, this trend appears to be fading away. The leading cryptocurrency has rallied by 46% YTD compared to Nasdaq’s 15%. Despite the underlying bearish factors, the crypto is riding on the forecast that the worst of 2022’s crypto winter is over. In the ensuing sessions, the focus will be on the steadiness of the support at $24,000.
Fundamentals
Wall Street investors have been particularly cautious in the past two weeks amid concerns that the Federal Reserve may approve higher interest rate hikes for longer. For instance, the tech-heavy Nasdaq index rallied by over 15% in the first month of 2023.
The rallying was largely founded on optimism that the Federal Reserve will ease on its interest rate hikes as the year unfolds. However, subsequent to the bank’s February interest rate decision, the released inflation and job data point to higher rate hikes for longer. With the markets yet to fully price in a hawkish Fed, Nasdaq has been rather range-bound; trading between $11,715 and $12, 149.
As was largely the case in 2022, cryptocurrencies have been closely correlated with the US stock market. However, bitcoin price movements in the past two sessions indicate that investors in the digital assets market are reading from a different script.
Typically, a tougher regulatory stance on cryptocurrencies by the US government, coupled with the high interest rate environment, should yield significant pressure for bitcoin price. However, investors appear unperturbed by these bearish drivers. After the crypto winter that shaped 2022, they are of the opinion that the worst is over.
Bitcoin price prediction
On Thursday, bitcoin price extended its gains to a level last recorded in mid-June 2022. Amid the rallying, I expect the bulls to be keen on defending the crucial support at 22,500.
Indeed, in the short term, the range between 23,417.03 and 25,234.58 will be worth watching. For further gains, the crypto will need to attract enough buyers to break the range’s upper border and subsequently rise towards a fresh 8-month high at 26,500.
