On May 17, Bloomberg reported that Bitcoin's price was highly correlated with tech stocks.

At that time, it was suggested that the leading cryptocurrency was perceived as a growth asset, influenced by:
→ the launch of Bitcoin ETFs;
→ expectations of Fed rate cuts.

However, during yesterday's Fed meeting, it was announced that rates might be cut once or twice (if inflation slows down significantly) by the end of the year. Following this, the Nasdaq 100 tech stock index (US Tech 100 mini on FXOpen) reached a historic high, surpassing 19,500 points. In contrast, Bitcoin's price is showing less confidence.

As the BTC/USD chart indicates:
→ Amid yesterday's news of falling inflation, Bitcoin's price jumped approximately 3% in two hours;
→ Today, the price has returned to its pre-news levels and has even dropped below them. This is a bearish sign.

According to the technical analysis of the Bitcoin to USD chart:
→ The price had been fluctuating along the median of an expanding fan pattern, as outlined in our May 16 analysis;
→ Each time the price deviated from the ascending median, it returned to it (as indicated by arrows), demonstrating a stable bullish consensus among market participants.

Now, the situation is changing:
→ After deviating downward from the median, the price is struggling to return (as evidenced by today's drop below the starting point of yesterday's surge);
→ The psychological level of $70k is providing resistance;
→ The downward channel (shown in red) is becoming more pronounced.

This could indicate that the consensus is breaking down, and there is a shortage of buyers willing to pay more than $70k per coin. If Bitcoin's price continues to underperform compared to the Nasdaq 100 index, this thesis will be further supported.

FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.

*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.