As rates drop, it looks like Bitcoin is ready to jump.
BTC/USD
Bitcoin breaks out. Friday has been very good to Bitcoin. We’ve seen a break of a crucial swing high. That is suggesting that the recent bottoming pattern was in fact the real deal. We’ll just have to wait and see, but there is a little bit of concern out there due to the fact that we had seen something similar to this from December to February and then we saw Bitcoin collapse.
That being said, a war has broken out since then and that of course changes a lot of things. What I find interesting is that as the 10-year yield collapses, Bitcoin is starting to be negatively correlated to that. I would also postulate here that during the war, Bitcoin was stubbornly okay. While everything else was falling apart, Bitcoin was quietly grinding sideways.
Technical Levels and Interest Rate Correlation
Sometimes it’s about what the market won’t do that you should be paying attention to. Bitcoin just wasn’t collapsing at that point. Now on Friday, I think we finally got the signal that the buyers are back.
The 200-day EMA sitting at the $83,000 level is an area that a lot of people will be watching as a potential target. Then again the $84,000 level which had previously been significant support. Pullbacks at this point in time I think continue to offer buying opportunities. I believe I said that yesterday or the day before on this channel, and it looks like that is actually what happened.
So, we like it when interest rates drive the market because it is such a clean setup. As rates drop, Bitcoin goes higher because people start to think about more risk on type of behavior. Keep in mind, Bitcoin is pretty far out on the risk spectrum. As these rates continue to fall with good news coming out of the Middle East, then you have a shot at Bitcoin really taking off.