Cryptocurrency

Bitcoin Drops Below $90K After Surpassing Record High of $93.4K, Possibly Linked to Nasdaq-to-S&P 500 Ratio Fluctuations

In a surprising turn of events, Bitcoin’s price has retreated from its record high of $93,445, hovering around the critical resistance level of $90,000. This level is identified by a trendline connecting the twin peaks from 2021, making it a key point to watch for investors and traders alike.

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The Twin Peaks Trendline

A similar trend has played out in the Nasdaq-to-S&P 500 (NDX/SPX) ratio, which is widely seen as a gauge of investor risk appetite in traditional and emerging technology sectors. This ratio has led bitcoin through its ups and downs since at least 2017, with CoinDesk first highlighting this pattern in April 2023.

Positive Correlation between BTC and NDX/SPX Ratio

The NDX/SPX ratio has been positively correlated with Bitcoin’s price since 2017. This means that when the ratio is trending upwards, it usually sends bullish signals to Bitcoin, causing its price to rise. Conversely, when the ratio is trending downwards, it can lead to a decline in Bitcoin’s price.

The Pattern Repeats Itself

In July, the NDX/SPX ratio peaked at new highs, right above the critical trendline joining the twin peaks from 2021. This sent positive signals to Bitcoin, causing its price to soar. However, since then, the ratio has taken a step back, settling below the trendline again.

BTC’s Price Movement Correlated with NDX/SPX Ratio

As of now, it appears that Bitcoin is following movements in the NDX/SPX ratio, just like it has for years. If this pattern holds, we might see BTC settle below $90,000 for a bit longer. The shenanigans in the options market also suggest the same.

Renewed Upswing in NDX/SPX Ratio

On the flip side, a renewed upswing in the NDX/SPX ratio would be a green signal for the bulls to go all in and take prices into six figures. Some traders are already betting on an eventual breakout above the $100,000 mark.

What’s Next for BTC?

With Bitcoin’s price hovering around the critical resistance level of $90,000, investors and traders are left wondering what’s next for the cryptocurrency. Will it break above the trendline and reach new highs, or will it settle below $90,000 for a bit longer?

The Options Market

The shenanigans in the options market suggest that investors are bearish on Bitcoin’s price in the short term. This could mean that the price might take some time to recover from its current levels.

Conclusion

In conclusion, the pattern between Bitcoin’s price and the NDX/SPX ratio is a fascinating one. As we have seen, the ratio has led bitcoin through its ups and downs since 2017. If this pattern holds, we might see BTC settle below $90,000 for a bit longer.