Bitcoin remains below the $70,000 mark, with a new report from Ecoinometrics suggesting the cryptocurrency may face further downtrends. The firm cites weakening equity momentum, structural changes in Bitcoin's volatility, and a steady Federal Reserve as key concerns.
Ecoinometrics notes Bitcoin's increasing correlation with equity markets and broader macroeconomic conditions. Current trends in these areas are not favorable for the digital asset.
Despite recent price stability attempts, Ecoinometrics cautions against interpreting this as a clear bottoming pattern, suggesting it may be a pause within a continuing bear phase.
Structural headwinds include ongoing outflows from Bitcoin Exchange Traded Funds (ETFs) and a general "risk-off" environment in financial markets. Bitcoin is trading below its 200-day moving average, a critical long-term trend indicator.
Analysis of past cycles shows that 12-month realized volatility typically surges during bull markets and subsequent crashes. In the current cycle, peak volatility has been lower, indicating a shift in demand drivers. ETF flows, which are generally larger and more systematic than retail-driven surges, now play a more dominant role in shaping market trends.