Bitcoin – Not Even the Equity Market Rout Can Give Bitcoin a Boost

Yet another lacklustre day for Bitcoin on Wednesday, with a 0.06% gain bringing to an end two consecutive days of minor losses that have left Bitcoin down just 0.55% for the current week.

Unlikely Tuesday’s relatively range bound moves, it was a choppier day for Bitcoin on Wednesday, rallying in the early hours to an intraday high $6,626.3, to break through the day’s first major resistance level at $6,585.97 and test the day’s second major resistance level at $6,621.93 before hitting reverse.

Sliding through the second half of the day, Bitcoin fell to an intraday low $6,536, holding above the day’s first major support level at $6,519.67 to move back into positive territory by the day’s end.

The 0.06% gain was relatively positive when compared to the rest of the crypto majors that struggled through the day, only a handful managing to close out the day in positive territory.

In stark contrast, the global equity market rout has seen the world’s largest indexes give up as much as 4% on a single day, the NASDAQ sliding into correction territory on Wednesday, with a 4.43% slide on the day.

Following plenty of debate late last year and in the early part of this year on whether Bitcoin and the broader market were more correlated to gold or the global equity markets, the lack of inflows as the equity market rout gathers pace suggests that, for Bitcoin at least, there is no real correlation to any other asset class, other than coincidental, the current sentiment across the more mature asset classes certainly supportive of an alternative more stable investment, one that Bitcoin has become only of late.

Ultimately, the lack of interest could just boil down to the fact that Bitcoin has been stuck in a rut and, holding cash would be a better way of managing the downside than assuming that the days of $1,000 plunges for Bitcoin are over.

Looking across the rest of the crypto majors, while there has been plenty of red of late, the shift in cryptomarket dynamics away from just being Bitcoin trackers has begun, though the market remains some way off from being in a position to truly differentiate blockchain deliverables and successes in the real world.

Some confusion over the structure, deliverables and perhaps more importantly, the reason for the existence of the respective cryptocurrencies that power the blockchains will have contributed to the lack of differentiation.

Ultimately, in a very similar manner to the global equity markets, it’s a case of supply and demand and the more successful a particularly platform, the larger the blockchain network and the greater the demand for the cryptocurrency or token in question.

While innovation and differentiation should be the key driver, the addition of cryptocurrencies onto exchanges has been a main contributor to the direction of the cryptos, a lack of a particular crypto’s availability on the larger exchanges certainly constricting both availability and demand.

Will the market mature enough to list all of the cryptocurrencies on exchanges across all jurisdictions, to place the investment decision into the hands of the investor?

Until that happens, it’s hard to imagine traditional investors flocking into the cryptomarkets and into Bitcoin in particular, when considering its viability as an alternative to fiat money.

At the time of writing, Bitcoin was down 0.38% in what’s been another choppy start to the day, with Bitcoin sliding through the first major support level at $6,517.97 and second major support level at $6,481.83 to an early morning intraday low $6,462.9 before steadying, the lack of direction likely frustrating investors who joined the mix late in search of some volatility.

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