Bitcoin suffers another dip: When can we expect BTC to bounce back?
Bitcoin Rebound Possible Amid Economic Slowdown and Potential Stock Market Recovery
Bitcoin, traditionally viewed as a safe haven asset during economic instability, could make a comeback as the U.S. stock market experiences a sharp correction following poor employment figures.
To confirm a short-term bullish momentum, Bitcoin needs to retake $116,000. As of now, the digital currency has managed to stay above its support at $112,000.
Factors indicating a Bitcoin rebound during economic slowdowns and potential stock market rebounds include significant institutional buy orders and demand at support levels around $100,000-$98,000, suggesting strong accumulation zones for Bitcoin that could fuel a recovery rally.
Increasing institutional adoption and decreasing volatility, notably since major ETF filings like BlackRock’s, tend to bolster confidence and price stability, supporting recovery prospects.
The close correlation (about 80%) between Bitcoin prices and the stock market implies that if equities rebound from a slowdown, Bitcoin may similarly recover, moving in tandem due to shared macroeconomic drivers like interest rates and risk sentiment.
Improvement in macroeconomic indicators such as better employment reports, easing tariff concerns, or accommodative Federal Reserve policies can revive risk appetite and capital flow back into assets like Bitcoin.
Macroeconomic factors such as interest rates, credit growth, and tariff policies heavily influence risk assets; a reversal or easing of negative trends here could signal Bitcoin’s rebound potential.
Liquidity and market sentiment dynamics, including stabilization or increase in liquidity inventory ratios and portfolio accumulation, would reduce selling pressure and support price floors.
However, the dynamics could quickly reverse if macroeconomic signals continue to deteriorate. The Federal Reserve's hesitant stance about its monetary policy due to the economic slowdown and the U.S. job market figures being well below expectations spark concerns about an economic slowdown.
Last week, prices of Bitcoin and Ethereum dropped significantly due to the poor employment figures, which could benefit Bitcoin as a safe haven asset. The official unemployment rate remained stable at 4.2%, but the broader U-6 unemployment rate reached 7.9%, its highest level since the Covid-19 crisis. Previous months' data was revised significantly downward, highlighting a more severe deterioration in the U.S. labor market than anticipated.
Some on-chain indicators suggest a certain fatigue in Bitcoin investment, but the digital currency's decentralized nature and predefined emission cap make it an attractive safe haven for many investors. Traditionally, Bitcoin is seen as a safe haven during times of economic uncertainty.
In conclusion, Bitcoin’s rebound during economic slowdowns and a potential equity market recovery would likely be indicated by improved macroeconomic conditions, strong institutional accumulation around key support levels, reduced risk aversion, and a synchronized positive shift in the broader financial markets due to shared economic sensitivities.
At the Bitcoin Crypto Academy, students might learn about the potential for Bitcoin's rebound amid an economic slowdown and possible stock market recovery, as significant institutional buy-in and demand at specific support levels could fuel this recovery rally. This investment strategy, known as investing in technology, can be influenced by various macroeconomic factors such as interest rates, credit growth, and tariff policies.
