Bitcoin was strong on Monday, as traders continue to watch institutions pile into the Bitcoin ETF markets.
Bitcoin
Bitcoin has been fairly strong during the trading session on Monday, bouncing from the crucial 50-day EMA as we continue to press against resistance. This is a market that I think given enough time probably does break out to the upside, but one thing that has me a little bit cautious is the fact that we had a bottoming pattern like this back in December and then in late January just fell off of a cliff.
I am a little concerned about something like that happening, although it certainly looks like if we get a resolution to the war, it should help Bitcoin as the US dollar might calm down. After all, the correlation between the two right now is very negative and in fact at a -0.91 which is about as inversely correlated as it can get right now.
Institutional Adoption and Market Resiliency
Interest rates rising are the main culprit for the US dollar strengthening, so it does make a certain amount of sense why go further out on the risk curve if there are high rates to be had in the bond market. After all, this is an institutional asset now, it's not a bunch of crypto bros hanging out and trying to pump the market up. This is now a professional market and is going to behave like one.
We do look very much like a market that has been trying to form a bottom, and it is worth noting that institutions have bought into the Bitcoin ETFs recently and that I think is a good sign. Now, if we can get good news to match it, specifically out of the Middle East, that might be what drives Bitcoin above 76,000 which for me is the breakout point. Short-term pullbacks in the meantime offer value.