Bitcoin continues its bearish trend that started in late August, losing its correlation with gold. The price decline is accompanied by weakening long-term holder interest and increasing volatility in the context of a falling US stock market.
Bitcoin Price Decline
Since late August, Bitcoin's price has dropped more than 15%, hitting a low of around $53,000. The CryptoQuant Bull-Bear Market Cycle Indicator has indicated a bearish phase since August 27, when Bitcoin was trading around $62,000. Since then, the price has fallen, and the outlook for further growth remains uncertain.
Long-term Holders Show Weakness
Long-term Bitcoin holders are also showing weakness. The LTH SOPR indicator from CryptoQuant, which measures profit margins on spent outputs, has been declining since July, indicating reduced demand and potential sales at lower profits.
Volatility and US Stock Market
Bitcoin's struggles also mirror the decline in the US stock market. The Nasdaq 100 Composite Index has fallen by 10% since July 9, and Bitcoin has taken a 16% hit over the same period. The correlation between Bitcoin and Nasdaq has flipped from negative to positive, now sitting at 0.39, indicating higher synchronization of their movements.
Conclusion. Volatility has always been part of Bitcoin’s identity, but current trends indicate decreasing volatility compared to stock markets. Bitcoin is becoming a more mature market, and history shows that low volatility often leads to price increases.
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