According to Foresight News , Wintertermute stated that macroeconomic factors are currently dominating everything, but cryptocurrencies showed resilience last week while stocks, bonds, and even gold declined. The high correlation between cryptocurrencies and stocks over the past few quarters is beginning to crack. The most likely explanation is that marginal sellers are dwindling. The cryptocurrency market's leverage is approximately $60 billion, roughly half of its peak level. In contrast, speculative holdings in gold have accumulated significantly. When all assets decline, cryptocurrencies face far less forced selling pressure to absorb.
This confirms what has been heard from various market participants. Looking at a 12-18 month timeframe, the current price level is quite attractive, although the range where BTC buyers are willing to enter extends from the current price all the way down to the low of $50,000. There is still room for further downside, but most of the deleveraging phase appears to be over. Currently, cryptocurrencies are holding their ground and narrowing the performance gap with other risk assets. Whether this momentum can be sustained once trading volumes recover remains to be seen. Next week's FOMC (Federal Open Market Committee) meeting is a near-term catalyst.
