- Bitcoin price plummeted alongside a decline in S&P 500 after the US Dollar hit its highest value since the opening week of 2023.
- The People’s Bank of China injected $73 billion liquidity in its banking system over the past week.
- When Bitcoin breaks its correlation with equities, BTC could wipe out its losses from the past week.
Bitcoin price remains correlated with US equities, with the recent decline on Friday in response to a strengthening US Dollar. China’s liquidity injection, Bitcoin’s correlation with US equities and macroeconomic factors like key inflation indicators are the three factors influencing BTC price.
Also read: Bitcoin holders brace for impact as BTC correlation with stocks increases ahead of US CPI release
These factors could fuel a Bitcoin price recovery
Bitcoin price nosedived to $23,000 as the largest cryptocurrency by market capitalization was rattled by a series of factors over the past week. The US Dollar hit its highest value since the opening week of 2023, resulting in a decline in Bitcoin and US equities.
According to analysts at crypto intelligence tracker Santiment, when BTC breaks out of its correlation with US equities, bulls could push the asset towards its recovery.
Bitcoin and equities declined as US Dollar pumped to seven-week high
The crypto China narrative is relevant on crypto Twitter, it is gathering steam with People Bank of China’s liquidity injection in its economy. Over the past week, the PBoC injected $73 billion into its banking system. The Central bank took similar actions on an equally high scale during the COVID-19 crisis in early 2020.
The PBoC’s actions are directed at stimulating the domestic economy that has been ongoing since the beginning of 2023. The Chinese Central bank's actions are correlated with the Bitcoin price bottom and this makes it crucial to the resumption of the cryptocurrency bull run.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.