Bitcoin [BTC] has been trading within an ascending channel since recovering from $65,000 week ago. This is the longest bullish streak since early January, indicating improved market sentiment.
In fact, at the time of writing, Bitcoin was trading at $73,862, up 2.83% from the daily charts. With this continued upward movement, the king coin has shown a potential trend reversal based on its comparative performance against stocks.
Bitcoin is starting to outperform stocks again
After a long period of underperformance compared to other markets, Bitcoin has once again shown strong performance compared to stocks. CryptosRus reported that BTC started to outperform stocks on a risk-adjusted basis over the past seven days.
After months of geopolitical tensions and macroeconomic pressures, BTC showed relative strength against the S&P 500 and Nasdaq. Citing the Coinbase report, CryptosRus stated that the market was past peak pessimism.
In fact, comparative Rolling Performance data from Checkonchain showed that Bitcoin outperformed stocks. Over the past week, BTC has shown a recovery, from -26% to -15%.
Over the same period, SPX and Nasdaq weakened significantly, with the SPX falling from -0.7% to -2.7%, while the NDQ fell to -2.7%. Other assets, such as TILT, also continued to weaken, falling from 2.6% to 0.1%.
This showed that participation and capital inflow improved, to the advantage of BTC compared to other stocks.
Furthermore, Bitcoin’s realized volatility has outperformed that of all major tech stocks. This time, BTC showed increased upside volatility, while technology stocks remained stable.
In fact, only gold and silver have outperformed BTC, while BTC has remained above SPX, NDQ and SPX Total Return.
Is this the first signal of a trend reversal?
Bitcoin showed relative strength compared to stocks except gold and silver, indicating improved market favorability. Market players have thus started deploying significant capital into BTC while withdrawing from other competing assets.
As a result, BTC’s upward momentum has gradually strengthened. In fact, Bitcoin’s Future Grand Trend flashed bullish for the first time in almost two months.
This momentum indicator pointed to a potential jump to $75,823 before another decline. If the Momentum Bias finally shows buyer dominance, this upward trend is likely to continue.
However, the Momentum Bias Index showed mixed momentum, with buyers and sellers battling for market control. This suggests that BTC will likely continue trading sideways, and the next move will depend on which side dominates the market.
Final summary
- Bitcoin has outperformed stocks on a risk-adjusted basis over the past week, indicating improved sentiment.
- BTC extended its bullish streak, hitting a monthly high of $74,451 before rebounding to $73,862 at the time of writing.