Bitcoin heads for $42K support as stocks pullback nudges BTC price lower
Turbulent macro moves underscore Bitcoin’s correlation to U.S. stocks indices, with BTC/USD reaching its lowest levels for March so far.
Bitcoin (BTC) broke through $43,000 after the March 3 Wall Street open with U.S. equities trending down.
Stocks, Bitcoin slide lower on the open
Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it stayed within a narrow intraday range on March 3.
Forty-three thousand dollars had held as support overnight, nonetheless seeing multiple tests as traders eyed a potential bounce zone around $1,000 lower.
#BTC
take out the previous swing low, lining up nicely with the green box pic.twitter.com/rplkQ0rhIS— Crypto_Ed_NL *not asking to send DM’s* (@Crypto_Ed_NL) March 2, 2022
“The last segment of our corrective structure that preceded the 3rd impulse wave from 10K to 60K+ was a triangle, would be nice to see something similar here if our bottom is in,” popular Twitter account Credible Crypto said on March 2, comparing current behavior to the bull run which began in September 2020.
“Remember a longer base typically leads to a stronger impulse. Pullbacks on $BTC to 38K–42K are healthy.”
Others previously considered a slightly higher local top may enter prior to the continuation of range-bound action.
At the time of writing, BTC/USD was at around $42,500, marking a low point for March.
Stocks were on edge on the day, with the S&P 500 down 0.7% a day after the clearest signals on a possible key rate hike yet from the United States Federal Reserve.
Geopolitical turmoil focused on Europe likewise remained the decisive macro force in play, as Russia and Ukraine met to begin further negotiations.
Safe haven status is back?
Professional trading firm QCP Capital meanwhile focused on Bitcoin’s potential advantage over largest altcoin Ether (ETH) as macro events unfolded.
Related: Bitcoin a ‘good bet’ if Fed continues easing to avoid a recession — Analyst
Bitcoin, the firm argued in an update to Telegram subscribers on March 2, is regaining its safe-haven status, while altcoins are unable to say the same.
“The focus on BTC was reflected even in the vol markets with 10d realized volatility 4% higher for BTC than ETH (99% vs 94.5%). Anecdotally, there has also been much more topside interest in BTC compared to ETH,” it wrote.
“This has caused the implied vol spread between BTC and ETH to drop back to lows of around 7%. With the recovery bounce in spot, implied vols have been trading softer as well. BTC 1-month implieds have fallen back to 65% from 80% highs.”
QCP added that “some downside risk” should remain in Q2 thanks to Fed policy, regardless of the size and timing of the rate hike.
