Analyst and trader Nicholas Merten has reservations on Bitcoin (BTC) despite the flagship crypto asset’s massive rally over the past week.
Merten tells his 511,000 YouTube subscribers that while the correlation of the Bitcoin stock index to the Nasdaq appears bullish, the macroeconomic environment is unfavorable.
“I definitely have to say that this chart right here, the Bitcoin to Nasdaq ratio, is what excites me the most. To see that we have been able to break above the 200-week and 200-day moving averages is definitely a really positive sign.
But as we saw here on the last trading day, we wiped out a lot of those gains. I’ve got to see it hold up here because, as the story goes, when we go up in this range [above $25,000]He doesn’t stay here long.
And we’re in a macro environment where for a higher risk asset like Bitcoin, where there’s talk of their on-ramps when it comes to getting them shut down by regulators… we’ve got the banking infrastructure around these assets crippling as we speak. Where will that liquidity come from?
I’m not saying that retail volume and speculators and just general long-term investors can’t drive it. But we haven’t even seen the typical correction of a typical crypto bear market.”
According to Merten, BTC is likely to be crushed by macroeconomic factors in the coming weeks.
“I just don’t see how Bitcoin is going to do very well in this environment. And until we start to see a more continued drift of Bitcoin away from the Nasdaq, where it continues to lead, I still can’t be too sure.”
Bitcoin is trading at $26,665 at the time of writing, up about 35% since March 10.
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