Bitcoin is finally showing some green over the past week as the cryptocurrency rose from the mid-area of its current levels. The number one crypto by market cap seems poised to extend its rally, can it finally break from its current range?
As of this writing, Bitcoin (BTC) trades at $29,000 with an 8% profit in the last 24 hours. Over the last week, BTC’s price has displayed a similar performance recording a 12% profit. Other cryptocurrencies in the top 10 by market cap are experiencing profits, but BTC is outperforming other assets in the sector.
Bitcoin Next Bull Run, Bad News For Tesla And Tech?
The key to tracking Bitcoin’s next bull run could be its correlation with tech equities. The nascent crypto industry has been moving in tandem with this sector since 2021.
At that time, the price of Bitcoin reached a new all-time high of around $69,000. The correlation with tech equities, as measured by the performance of the Nasdaq 100, has been decreasing over time and could continue this trajectory.
According to the former hedge fund manager for Goldman Sachs, Raoul Pal, Bitcoin, and crypto are on track to outperform tech equities and “all other equities.” Despite the short-term turmoil in 2023, BTC’s price experienced a 75% increase year-to-date (YTD).
In that sense, Ethereum (ETH), Tesla (TSLA), and other tech stocks have been rallying and will likely see further profits. As of this writing, ETH and TSLA experienced 50% and 160% profit, respectively.
However, Pal believes BTC will take the crown in the short term as the cryptocurrency extend its “bull market.” According to Pal, the bear market for BTC ended in October 2022 as liquidity across the financial sector bottomed out.
As seen in the chart below, liquidity and financial conditions have been improving, according to Pal. In the past, whenever liquidity increased, BTC and equities followed.
The expert added expanding on BTC’s capacity to outperform tech while breaking its long-term correlation with these financial assets:
Yes, tech is VERY overbought. Yes, it will correct at some point. Yes, this is a bull market. When tech corrects, crypto probably explodes to new highs on the year again too. Welcome to the Exponential Age.
Cover image from Unsplash, chart from Tradingview