- BTC and ETH have managed to hold their ground during the 2020 pandemic
- BTC traded above the $26,000 mark, but ETH had to provide a solution
The crypto market is notorious for its highly unpredictable nature as it is influenced by various global developments. The latest data shows that the crypto market may witness a new cycle of high volatility as global market conditions deteriorate. This could also impact major cryptocurrencies such as Bitcoin [BTC] And Ethereum [ETH].
Since there is a possibility of the stock market falling, there is also a chance that the crypto world will undergo a major price correction. However, a look at history and other data sets also hinted that the scenario could play out differently this time.
Read Bitcoins [BTC] Price prediction 2023-24
Is the market about to collapse?
WhaleWire, a popular X account (formerly known as Twitter) that posts updates related to the crypto market, highlighted that bankruptcy filings have increased in the United States. Specifically, bankruptcy filings have recently reached levels comparable to the Great Recession of 2008 and the COVID-19 pandemic of 2020.
WARNING: Bankruptcy filings have recently reached levels comparable to the Great Recession of 2008 and the COVID-19 pandemic of 2020.
This indicator often indicates that the economy is not performing well, and has historically always been followed by massive stock market crashes. pic.twitter.com/DHUEm59QUS
— WalvisWire (@WhaleWire) September 24, 2023
This indicator often indicates that the economy is not performing well. Furthermore, this has historically been followed by massive stock market crashes. Since this increases the likelihood of a US stock market crash, many can expect the crypto market to follow a similar trend of decline. However, this time things could be different as the crypto market has somewhat parted ways with the stock market.
For reference, looking at the 2020 pandemic, while the stock market took a hit, most cryptocurrencies managed to hold their ground. In fact, the market boomed over the next year, allowing top coins like BTC and ETH to reach all-time highs.
Source: Santiment
Bitcoin and USD are no longer linked
Apart from that, that was evident from another development that took place during the last few delays BTC has severed ties with the US dollar. If reported Previously by AMBCrypto, BTC’s correlation index with the USD reached zero. To begin with, the metric tracks the linear dependence between the prices or values of two particular commodities or assets.
So it means that the performance of the US dollar will have no effect on how the king of crypto performs in the near future or until the index changes again. This further supported the possibility that the crypto market would remain unaffected by a possible US stock market crash.
On the contrary, the crypto market could benefit from such an adverse situation as more new investors could turn to cryptos and resort to abandoning traditional investments for the safety of funds.
Confidence in Bitcoin is high
While we speculate about what lies ahead, let’s take a look at the Bitcoin mining sector. Coinwarz’s data indicated that BTC’s hashrate has been rising comfortably for several years.
This clearly reflected the confidence of a multi-billion dollar industry in Bitcoin. Because BTC is the largest cryptocurrency, confidence in the cryptocurrency is increasing BTC largely means that the world also has confidence in the broader crypto market.
Source: Coinwarz
Moreover, a look at BTC’s statistics also suggested that the near future looks at least bright for the coin. BTC’s foreign exchange reserve fell, meaning the currency was not under selling pressure. From CryptoQuantBTC’s aSORP was green.
This meant more investors sold at a loss, and in a bear market this is seen as a bullish update. The same remained true for Bitcoin’s binary CDD, which showed that long-term holders’ moves over the past seven days were lower than the average.
Source: CryptoQuant
Furthermore, BTC’s taker-buy-sell ratio indicated that buying sentiment was dominant in the derivatives market. At the time of writing, BTC was comfortable trade above the $26,000 mark at $26,107.82 with a market cap of over $508 billion.
A look at the state of Ethereum
While BTC’s metrics looked bullish, the state of the king of altcoins did not. From CoinMarketCapETH has fallen by more than 3% in the last 24 hours. At the time of writing, it was trading at $1,577.01 with a market cap of over $189 billion. Like Bitcoin, the crypto market is also influenced by the performance of Ethereum.
Therefore, it is important to also look at the state of ETH to assess what direction the crypto market could take in the coming days. ETHThe Relative Strength Index (RSI) registered a downward trend and was well below the neutral level of 50.
The Moving Average Convergence Divergence (MACD) showed the possibility of a bearish crossover. This could further depress the price of the token. However, the Money Flow Index (MFI) was bullish when it rose in the recent past.
Source: TradingView
Is your portfolio green? Check the Ethereum profit calculator
Considering the aforementioned data sets and developments, the possibility of the crypto market witnessing a massive downtrend in the near future seemed unlikely. However, as Ethereum bears step up their game, it will be interesting to see which way the wind shifts in the coming weeks.