In 2022 there will be a strong correlation between Bitcoin and The American Stock Exchange, S&P500*, and the technological NASDAQ index*. The stock index correction was the FED's decision to increase the rate and tighten monetary and credit policy due to rising inflation in U.S. economics. This measure ended up making government securities fixed in dollars more attractive. Thus, investors started to drive their funds out from the risky assets, stocks, and cryptocurrencies. The Bitcoin fall is still continuing. As Bitcoin acts as a guide for the whole crypto market, the biggest part of altcoins is showing a long-term increase, as well.
*S&P500 is a stock market index monitoring the performance of 500 large companies listed on stock exchanges in the U.S.
*NASDAQ index is a stock market index that includes almost all stocks on the Nasdaq stock exchange.
Today 25 May 2022, Bitcoin is around $30 000. If we look at the Bitcoin chart, we'll see that we are in the global support zone in this particular. Tracing the same trend in January, February, June, and July 2021, there were purchasings and the creation of accumulation zones by market players. This situation shows mechanized buyings in the given price zone. Long candle tails tell us about the automatization of purchasing. Automated trading is performed by trading bots or limit orders for definite price trades.
The correlation of Long (the green one) and Short (the red one) positions on a weekly chart shows an inflow of buyers within the particular price bar.
This tendency is proved by the top 101 richest addresses buying Bitcoin with cautious optimism.
According to the diagram that uses the analysis of nodes chain for defining periods when Bitcoin is overpriced or, on the contrary, undervalued regarding its 'fair price' on-chain indicator MVRV Z-score shows that we're close to the historically green zone where the beginning of the uprising Bitcoin cycle is formed.
Positive Factors for Bitcoin in 2022
The acceptance of Bitcoin as a payment method in Salvador. Today, the amount of crypto wallets of Salvador citizens overpasses the number of their bank accounts.
The USA is discussing possible perspectives of the Bitcoin integration into the USA economic system.
There also appeared a serious interest in The overcame 70% bar. Such an interest could be explained by positive forecasts for market growth and to protect their own reserves from inflation. Traditionally, in such situations, it was gold.
The U.S. Securities and Exchange Commission, SEC, accepted ETF trading by exchange-traded funds. That makes Bitcoin more available for smaller investors.
Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.