Key Takeaways
Macroeconomic factors suggest that both Bitcoin and the S&P 500 still show growth potential. The Asian market could play a decisive role in Bitcoin’s trajectory in the coming days.
Over the past week, Bitcoin [BTC] has struggled with low liquidity inflows, leading to a 10% decline since reclaiming a new all-time high on the 14th of August.
Notably, liquidity droughts like this often signal potential bearish scenarios, as investors begin offloading assets when the market reaches a seasonal climax.
However, new macroeconomic insights argue there is still a bullish case for the market, even though the risk of a reversal remains.
Macro signals remain supportive
U.S. macroeconomic indicator on Alphractal show that both Bitcoin and the S&P 500 have room to rally further in the coming days, according to the Fed Financial Stress Index (FFSI).
This index tracks market tension, high readings above 0 indicate sell-side pressure, while values below 0 reflect market calm and buying interest.
Historically, the metric has predicted significant market movements, including during the 2020 lockdown. At press time, the FFSI sat below 0, signaling room for continued growth.
Sentiment appears to lean more in favor of Bitcoin over the S&P 500, especially given the past year’s performance, with Bitcoin up 86.2% compared to the S&P’s 15.3% per Artemis.
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Author: Olayiwola Dolapo
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