Decentral Block Post

Let's rewind the tape to the end of 2021 when Bitcoin (BTC) was trading near $47,000, which at the time was 32% lower than the all-time high. During that time, the tech-heavy Nasdaq stock market index held 15,650 points, just 3% below its highest-ever mark.

Comparing the Nasdaq's 75% gain between 2021 and 2022 to Bitcoin's 544% positive move, one could assume that an eventual correction caused by macroeconomic tensions or a major crisis, would lead to Bitcoin’s price being disproportionately impacted than stocks.

Eventually, these “macroeconomic tensions and crises” did occur and Bitcoin price plunging another 57% to $20,250. This shouldn’t be a surprise given that the Nasdaq is down 24.4% as of Sept. 2. Investors also must factor in that the index’s historical 120-day volatility is 40% annualized, versus Bitcoin's 72%, which is roughly 80% higher.

That’s the core reason why investors should re-evaluate investing in Bitcoin. The risk-to-reward potential after the downward adjustment in risk assets possibly leaves more upside for the cryptocurrency considering three factors: higher volatility during a moderate recovery, equity offerings and resistance to regulatory sanctions.

The problem is the market is now in a drawn-out bear trend and there are no signs that point to a quick recovery because double-digit inflation in many countries continues to pressure the central banks to sustain a tighter stance. Notice below how both Bitcoin and the Nasdaq have struggled throughout 2022.

Nonfarm payrolls rose by 315,000 jobs in August, down from the July increase of 526,000 jobs. The report was just below the Dow Jones estimate of 318,000 jobs and the slowest monthly gain since April 2021. The S&P 500 rose in response to the report, but later erased its gains, indicating that bears continue to sell on rallies.

That may be because the U.S. dollar index (DXY), which had retreated from its Sept.1 20-year high, recovered part of its losses. The bears will have to pull the DXY lower to boost prices of stocks and the cryptocurrency markets as both are usually inversely correlated with the dollar index.

Although Bitcoin (BTC) has dropped more than 70% from its all-time high of $69,000, several traders have held on to their position. Data from trading analysis platform TipRanks shows that 62% of wallets have held Bitcoin for a year or more. The number of wallets holding Bitcoin for less than a month is only 6%. This suggests that investors are taking a long-term approach and holding on to their positions.

Could bulls push Bitcoin and altcoins above the overhead resistance levels? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin broke and closed above the downtrend line on Sept. 1, which is the first indication that the short-term corrective phase could be ending.

Bitcoin (BTC) passed $20,400 for the first time this month on Sept. 2 as United States economic data outperformed expectations.

Declining dollar accompanies BTC price rebound

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $20,500 after the Wall Street open, marking new highs for September.

The pair had responded well to U.S. non-farm payroll data, which in August showed inflows dropping less than expected.

A further boost came from news that the G7 had agreed to implement a price cap on Russian oil, with the European Union also planning to target the country’s gas imports.

While the S&P500 and Nasdaq Composite Index both added 1.25% after the first hour’s trading, the U.S. dollar conversely fell in step, looking set to dive below 109 at the time of writing.