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Bitcoin price threatens to return to the range below $19,500 if the bulls fail to defend current levels. The cryptocurrency was on an upward trend after weeks of consolidation, leading to a spike in positive market sentiment, but optimistic participants may have been quick to declare more gains.
At the time of writing, Bitcoin price is trading at $20,400 with a 2% loss in the last 24 hours and a 7% gain in the previous week. Other cryptocurrencies in the top 10 by market cap indicate weakness, but maintain gains on high time frames.
Bitcoin price reacts badly to corporate earnings, what to expect?
Data from research firm Santiment indicates that the recent upward momentum in Bitcoin price has been followed by a spike in on-chain activity. In this sense, BTC trading volume and activity hit a 4-month high, which usually precedes more significant moves.
However, the recent earnings season in traditional markets could undermine any bullish potential. Bitcoin and stocks are moving together due to the uncertainty in the macroeconomic landscape.
So the earnings season has had a significant impact on the emerging asset class. Today, Amazon (AMZN) and Apple (APPL) released their Q3 2022 report. Like Meta (META), formerly known as Facebook, the companies fell short of market expectations.
As a result, the Nasdaq 100, the stock index that tracks the performance of top technology companies, plunged. The weakness in the old financial markets has become a headwind for Bitcoin price.
Still, there may be hope for stocks and Bitcoin, if the Nasdaq 100 can hold the line at its current level. According to a pseudonym analyst:
Pretty big sweep from last week’s low on the $NASDAQ. Volatility everywhere with $META & $AMZN being slaughtered today. $AAPL with a solid report but dragged down a bit by the rest. However, I expect it to recoup some of those losses to close out the week.
The future could be in the past
According to Jurrien Timmer, director of Macro for Fidelity, earnings season looks like like ‘every other’. 71% of listed companies exceeded expectations by a relatively small margin. So Timmer classified the event as another “nothing to see here” quarter.
This data suggests that Bitcoin price and other assets could continue doing what they have been doing in 2022: a sideways trend with no clear direction. Next year could be a decisive year for global markets, but now Timmer is hinting at more boredom with regard to price performance.
The expert believes that the stock market, and thus all correlated assets, move along with the 1946 and 1947 markets, periods of high inflation for the US dollar. Ultimately, this scenario could be negative for investors on the short end of the trade.
The current market cycle has similarities to 1946-47. Then, as now, stock prices reflected the impact and then the aftermath of a major fiscal/monetary boost. If the analog holds, we could be in for another 15% rally against the trend followed by another test of the lows. pic.twitter.com/2VFvaJw2qd
— Jurrien Timmer (@TimmerFidelity) October 26, 2022