After showing difficulty in establishing itself above $20,000 for the past two months, bitcoin (BTC) is now struggling to make it to support to start a race to the tops. In this context, analysts are wondering about the events that would be likely to favor the stimulus of the next bull cycle of the cryptocurrency.
Analyst specialist in cryptocurrencies, Kevin Svenson has a clear opinion on the matter. During a video session broadcast on his YouTube page, the latter identified interference with the Federal Reserve’s intervention policy as a possible catalyst for this move.
A policy that arose from instability in the stock market
To better explain the impact of Fed policy, Svenson first touched on the correlation between the stock market and the price of bitcoin. He said the latter follows a downward trend in the high volatility of the S&P 500 (SPX).
“Even when the stock market is weak and there are higher highs, lower lows, bitcoin is not supported on those rallies. It’s just in a severe downtrend. People are very reluctant to bet bullish on bitcoin when the stock market is unstable. Even when the stock market is rising, bitcoin never fails to find this support. “, he declared.
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After the link between the two markets was established, the analyst then turned to the origin of the instability that dominates the stock market. According to him, this is the intervention policy of the Federal Reserve, with a catastrophic increase in interest rates for the markets.
Therefore, Svenson declares that it will be necessary to wait for a change of direction from the FED in this matter, so that the bitcoin becomes bullish again. “This deal has to be a big catalyst to change direction. I think the market is waiting for a real pivot from the Fed. “, he declared.
A change that won’t happen until next year
While there is no indication yet when Fed leaders will stop intervening to control inflation, Svenson believes the changes will happen next year. He was also a bit more specific about the recovery of the bitcoin market in this context.
Based on previous cryptocurrency cycles, the analyst has targeted April as the start of the next BTC bull cycle.
“And why do I say April? We talked about this in the last two updates. We showed the traditional bitcoin cycles. The bull market only really starts when you break above this declining red resistance line. This is when the bullish pivot begins. But we are still far from it. In theory, it will be in April. »