Bitcoin volatility in the $18k to $20k range is increasing
- Altcoin Sherpa, bearish on three altcoins, also warns of a possible BTC price crash.
- Bank of America analysts say BTC’s moves compared to other assets show it could become a safe haven again.
Altcoin Sherpa, a famous anonymous cryptoanalyst, has revealed that he is bearish on three altcoins – Fantom (FTM), Injective Protocol (INJ) and Near protocol (NEAR). He tweeted that the governing token of smart contract-enabled blockchain phantom (FTM) is NEAR to collapse.
Sherpa also takes a similar view on the original token of decentralized derivatives exchange, the Injective Protocol (INJ). However, he added that he is in the process of exiting his trading position in INJ due to a huge selling trend.
$INJ: The gift that keeps on giving so far, but this entire area is a large supply zone. That said, it has been tapped several times in the last few weeks and I think many sellers are gone around $2. I’m running this one at $2.50, entry around $1.80 #INJUSDT pic.twitter.com/nAtIpm1tX1
— Altcoin Sherpa (@AltcoinSherpa) 8 October 2022
As for NEAR (the original token of the decentralized app platform, the Near protocol), Sherpa explained why he is bearish about it. However, he said NEAR’s weak price resistance at this point could cause it to fall. Altcoin Sherpa also shares his prediction on Bitcoin’s price.
Sherpa predicts a decline in BTC’s price because it has been trading in the $19,000 range for four months. He further explained that it is likely that Bitcoin will test three lower price levels based on past trends.
$BTC: I think this one is just going to keep hacking. I don’t see any real direction in the short term; looks like it’s probably heading back to the asking range around $18.8k. #BTC #Bitcoin pic.twitter.com/jmAXJK9Tvm
— Altcoin Sherpa (@AltcoinSherpa) 19 October 2022
Sherpa is known for its near-accurate predictions on the price movement of most altcoins, including DOGE and Ethereum. So it’s no surprise that his 185,000 followers on Twitter are always eager to hear from him.
Bitcoin Shifting Correlations, A Haven Again?
Meanwhile, Bank of America analysts believe that Bitcoin’s movements compared to other digital assets indicate that investors may start to consider it a safe haven again. Their claims follow the period Bitcoin traded as a risk asset.
The leading digital asset had a 40-day correlation with the NASDAQ 100 of about 0.72, up from zero in mid-August. It also had a correlation of 0.50 and 0.69 with the S&P 500 and Gold respectively.
These have leveled off and are even below the record levels of a few months ago. Andrew Moss and Alkesh Shah (analysts from Bank of America) see this Bitcoin movement as an indication of changing correlation.
The analysts wrote, “the steady increase in gold correlation and a decline in positive correlation with the S&P 500 suggests that investors are reevaluating Bitcoin as a safe haven.” This perspective is important given the uncertainty in macroeconomics and a yet-to-be-seen market bottom.
With stimulus due to the COVID-19 pandemic flooding global economies, Bitcoin has traded in parallel with risk assets for the past two years. The parallel trend continued despite global central banks such as the US Federal Reserve raising interest rates to curb rising inflation.
The Bank of America note is similar to recent insights shared by Galaxy Digital CEO Mike Novogratz. Speaking in an interview on Thursday, Novogratz said that Bitcoin and gold can be compared to “the canary in a coal mine.” Therefore, he expects BTC’s price to rise ahead of altcoins.
