Bitcoin (BTC) is set to continue its unprecedented losing streak on May 29 as BTC/USD remains in an intraday range.
Stock correlations offer no comfort to Bitcoin bulls
Data from Cointelegraph Markets Pro and TradingView show that the largest cryptocurrency has fallen for nine straight weeks, the largest downtrend in history.
Bitcoin’s weekly chart has already closed at dubious records, providing the backdrop for continued weakness that disappointed analysts over the weekend.
Even the stock market, beleaguered by central bank tightening, has rallied over the past week, while bitcoin and most altcoins have slumped.
“Most worrying is the divergence between stocks and cryptocurrencies. The S&P and Nasdaq have traded about 10% higher since their May 20 lows, while BTC and ETH have traded higher over the same period Both are lower," trading firm QCP Capital wrote in its most recent market newsletter, published on May 29:
"This is not the direction of decoupling we want!"
QCP echoes the existing sentiment that Bitcoin has underperformed compared to previously highly correlated stocks.
The popular Twitter account Il Capo of Crypto went on to predict renewed pressure as the indices now encounter their own sell-side friction.
“Last time the S&P 500 made new highs and Bitcoin USD made new lows, and when the S&P 500 reversed, we saw a continuation of the bear market. Now the SPX has met resistance,” read a post that day.
Bitcoin faces a 'May drop'
In this scenario, BTC/USD would end the month down around 22%.
Data from on-chain monitoring resource Coinglass confirms that this would make May 2022 the second-worst May in Bitcoin’s history.
Meanwhile, analysis of the downtrend shows that the current decline from the high is the fourth-longest on record, now at 200 days.
Analyst Matthew Hyland noted that the longest such downtrend occurred in 2014-15 and lasted more than twice as long.
As further reported by Cointelegraph, historical patterns suggest that there may now be a period of sideways price action followed by a capitulation event and a macro bottom.
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