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Bitcoin prices slip, yet THESE macro signals hint at a BTC rebound
Bitcoin continues to hold a bullish stance, but cautionary signals are starting to surface as the asset’s price has slipped by 10% since reclaiming a new all-time high on August 14th. Despite this recent decline, several macroeconomic indicators suggest that there may still be room for growth.
One such signal comes from the Fed Financial Stress Index (FFSI), which tracks market tension and sell-side pressure. Historically, this metric has accurately predicted significant market movements, including during the 2020 lockdown. At present, the FFSI is below zero, signaling a lack of selling interest and room for continued growth.
Furthermore, sentiment appears to be leaning in favor of Bitcoin over the S&P 500, with BTC up 86.2% compared to the latter’s 15.3% gain over the past year. This suggests that if buying resumes, investors are likely to channel funds into Bitcoin rather than traditional assets, as their risk appetite remains strong.
However, analysts have cautioned that price action may react faster than these macro metrics, potentially leading to a reversal in the near term. Joao Wedson, a renowned crypto analyst, highlighted this risk, warning that if the FFSI breaks and holds above zero, it could indicate a destabilization of the US situation, which would have a direct impact on risk markets.
In contrast, the Asian market is showing early signs of recovery, with investors once again placing bids on Bitcoin as seen in the Korean Premium Index, which has read 0.3 on CryptoQuant. This follows an extended downtrend marked in red on the index. If this trend sustains, it could spark further inflows and bolster the cryptocurrency’s value.
On the other hand, the Coinbase Premium Index, a key market indicator, has dropped to 0.017 at press time, suggesting increased sell-side activity from US investors. However, if this metric rebounds, it could reinforce the growing bullish sentiment around Bitcoin.
In conclusion, while Bitcoin’s recent decline may have raised concerns among investors, these macroeconomic signals and indicators suggest that there may still be room for growth in the cryptocurrency market.
Source: AMBCrypto
Source: ambcrypto.com
