According to research firm Wolfe Research bitcoin, It is struggling to break the $70,000 barrier and is exhibiting similar behavior to small-cap stocks. Rob Ginsberg of Wolfe Research emphasized in a recent note that Bitcoin has failed to overcome the stubborn resistance level.
Ginsberg pointed out that the Bitcoin price stalled at the same $70,000 level in 2021, falling nearly 50% from its peak over the next three months. However, it managed to reach an all-time high later that year. Drawing a parallel between Bitcoin and small-cap companies, he said, “The two have traded quite closely for years. “Rising interest rates were bad for both, and we saw that investors approached both with similar risk appetite.”
Since the beginning of March, Bitcoin has been around $60,000. Bitcoin reached a record high of $73,797.68 on March 14 and has fallen to the $59,000 level several times. According to analysts, the market has already absorbed two important upside catalysts: Bitcoin ETF approvals and halving. Additionally, interest rate cut expectations have been postponed and, according to some speculations, the FED may not cut interest rates until 2025.
Despite short-term issues, Ginsberg maintains a positive long-term outlook for BTC. However, he warned that the phase of retreat from the last record could be prolonged. The analyst expressed skepticism about Bitcoin’s success if stocks continue to decline. All major stock indexes are down this month, and the small-cap Russell 2000 is on track for a deeper loss of about 6%.
“We have a hard time seeing stocks changing direction and Bitcoin diverging and rising,” Ginsberg said. “While we still think it makes sense to remain bullish over the long term, we don’t see the same kind of convincing signals in the near term.”
*This is not investment advice.
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