Bitcoin Breaches $41,000 Amid Strong Correlation With Equity Markets

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The last 48 hours have been an interesting one for Bitcoin (BTC) and the cryptocurrency market and have greatly favored bulls.

The benchmark cryptocurrency breached the $41,000 on Friday for the first time in two weeks pushing the broader market valuation up by over 10% in the last seven days. Interestingly, some factors played a critical role in the recent bullish resurgence.

One of these factors is the recently-developed correlation between Bitcoin and the traditional stock market. That said, recent favorable macroeconomic events have boosted the equities market, which also benefited BTC and the crypto market by extension.

Also, a recent CoinGlass revealed that the market recorded a massive $220 million short position liquidating between Friday and Saturday across top crypto exchanges, including Binance, OKEx, FTX, Bybit, Huobi, BitMEX, and many others.

That said, 80% of all liquidations in the last two days were short positions, which sparked a short squeeze.

Finally, the market recently welcomed better-than-expected NFPs data from the US labor department, which showed that the country added 467K jobs in January, despite the adverse effects of the Omicron variant. The US Labor Department’s Bureau of Labor Statistics revealed that the unemployment rate grew from 3.9% to 4% in a short period.

Key Bitcoin Levels to Watch — February 6

After recording a ‘cup’ pattern between Thursday and Friday, BTC finally received the push it needed to post a leg-up, the next phase of the ongoing mini bullish cycle. However, thanks to influx from other fundamental factors, the benchmark cryptocurrency recorded a sharp surge to the $42,000 top within 12 hours.

BTCUSD – 4-Hour Chart on Gemini. Source: TradingView

The flagship cryptocurrency has now recorded a momentum slowdown at the $42,000 top and has fallen into a short consolidation between $42,000 and $41,000. That said, we are likely to see a bullish continuation over the coming hours and days amid a goodish pickup in the global financial markets and the crypto space.

Meanwhile, my resistance levels are at $42,000, $43,000, and $44,000, and my key support levels are at $41,000, $40,000, and $39,000.

Total Market Capitalization: $1.90 trillion

Bitcoin Market Capitalization: $789.1 billion

Bitcoin Dominance: 41.5%

Market Rank: #1

 

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.