Bitcoin holds steady despite technical downtrend

The British pound hit record lows this week, falling to $1.03 – sending shockwaves through world markets and adding jitters to the already sharp rate hikes in the US.

Although the US Dollar Index has trended higher on a monthly basis since May this year, six of the 11 Wall Street stock indexes fell by more than 2% as worries about a global economic slowdown linger.

The price of Coinbase Global (COIN) also fell by 9.5% in the last 24 hours from 2:00 PM ET, following a downgrade from Wells Fargo to “underweight” on Thursday.

In previous years, inflation often correlated with an increase in local interest in buying cryptocurrencies, Serhii Zhdanov, CEO of EXMO, a UK-based cryptocurrency exchange, told Blockworks.

However, the crypto bear market as a result of the crash of several cryptoassets has damaged the reputation and interest in cryptocurrencies, he said.

“Cryptocurrencies are no longer perceived as hedging assets,” Zhdanov said.

All things considered, the prices of both bitcoin and ether remained relatively stable.

Declining correlation with technology

Bitcoin briefly rose 2.7% in the past week from about $18,000 last Thursday to a high of $19,600 today. Likewise, the price of Ether has held steady over the past week, rising 4% from $1,270 last Thursday to around $1,300 today.

The leading crypto asset has been trading in a range between around $18,500 and $20,300 since September 13.

Katie Talati, director of research at Arca, notes that “in general, crypto is very negatively correlated with the US dollar, particularly bitcoin, which makes sense as bitcoin is a monetary substitute for the US dollar.”

Bitcoin and the broader crypto markets have tended to be highly correlated with the tech-heavy Nasdaq Index (QQQ).

But both correlation trends have changed noticeably this week – that is, BTC is less correlated with tech and more correlated with the dollar, rather than its typical inverse relationship.

“The rise in GBP this week along with other currency volatility has led to a stronger bid and narrative for bitcoin that we haven’t seen in months,” Talati said.

Other cryptocurrency token prices of note this week include troubled lender Celsui’s CEL token, which fell from $1.5 to $1.3 after CEO Alex Mashinsky announced he would step down from his position. Cosmos’ ATOM token, which surged to nearly $17 on Sept. 17 in the run-up to the Cosmosverse conference this week, has since fallen back to about $12 by the time the conference ends.

In the following week, Talati said some of the tokens she will keep an eye on include Chiliz’s CHZ token and Algorand’s ALGO token, which will be featured during the FIFA World Cup in November, and Apecoin, as it prepares to launch staking in late October.

She added that “[ether] is at the top of my list after merging, any new supply is locked and new supply released is far lower than when Ethereum was a PoW chain. I think the market is largely underestimating this trend.”

Macauley Peterson contributed reporting.

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