Bitcoin Price Loses Steam At $20,500, Earnings Season Plays Against Crypto

The Bitcoin price is at risk of returning to its range below $19,500 if bulls fail to defend current levels. The cryptocurrency was trending higher after weeks of consolidation, leading to a spike in positive market sentiment, but optimistic participants might have been fast to proclaim more profits.

At the time of writing, the Bitcoin price trades at $20,400 with a 2% loss in the last 24 hours and a 7% profit over the previous week. Other cryptocurrencies in the top 10 by market cap hint at weakness but preserve their gains on high timeframes.

Data from research firm Santiment indicates that the recent upside momentum in the Bitcoin price was followed by a spike in on-chain activity. In that sense, BTC’s trading volume and activity reached a 4-month high which usually precedes more significant moves.

However, the recent earnings season in traditional markets could cap any bullish potential. Bitcoin and stocks are moving in tandem due to uncertainty in the macroeconomic landscape.

Thus, earnings season has significantly impacted the nascent asset class. Today, Amazon (AMZN) and Apple (APPL) published their report on Q3, 2022. Like Meta (META), formerly known as Facebook, the companies failed to meet market expectations.

As a result, the Nasdaq 100, the stock index that tracks the performance of top tech companies, dived. The weakness in the legacy financial markets has become a headwind for the Bitcoin price.

Still, there might be hope for stocks, and Bitcoin, if the Nasdaq 100 can hold the line at its current levels. According to a pseudonym analyst:

Pretty big sweep of last week’s low on the $NASDAQ. Volatility all around with $META & $AMZN getting slaughtered today. $AAPL with a solid report but being dragged down by the rest a bit. Kinda expecting this one to take back some of those losses to end the week though.

According to Jurrien Timmer, Director of Macro for Fidelity, earnings season looks like “any other.” 71% of public companies beat expectations by a relatively small margin. Thus, Timmer classified the event as another “nothing to see here” quarter.

This data suggest that the Bitcoin price and other assets might continue doing what they have done across 2022: trend sideways with no clear direction. Next year might be a decisive year for global markets, but now Timmer hints at more boredom regarding price performance.

The expert believes the stock market, and therefore all correlated assets, are moving in tandem with the 1946 and 1947 markets, periods of high inflation for the U.S. dollars. Ultimately, this scenario could be negative for investors on the short side of the trade.

Today’s market cycle has similarities to 1946-47. Then, as now, stock prices reflected the impact and then hangover of a major fiscal/monetary impulse. If the analog holds, we could be in the process of another 15% counter-trend rally followed by another retest of the lows. pic.twitter.com/2VFvaJw2qd

— Jurrien Timmer (@TimmerFidelity) October 26, 2022