Tuesday saw a slight recovery in Bitcoin prices, following a period of decline, with the cryptocurrency rising by 4%. This upturn had a positive impact on both the altcoin market and the stock market, particularly for companies affiliated with digital assets.
Bitcoin's price was hovering above $26,200 at the time of writing, marking a more than 4% increase in the past 24 hours. The green trend comes as a relief to investors after the previous day's 'death cross'. A flip of the $26,430 resistance into support could be key to establishing a sustained recovery rally for Bitcoin.
Crypto-affiliated publicly traded companies such as Riot Platform (NASDAQ:RIOT), Coinbase (NASDAQ:NASDAQ:COIN), MicroStrategy (NASDAQ:MSTR), and Marathon Holdings (NASDAQ:MARATHON) saw a jump in their stock prices. Riot Platform, for instance, recorded an increase of 5%, rising by nearly 10% during intra-day trading hours.
Despite the overall market remaining relatively calm, these companies are enjoying gains as Bitcoin bounces back. This is attributed to the positive correlation between these companies and Bitcoin. For instance, RIOT, MARATHON, and MSTR have a correlation with Bitcoin closer to 1, while COIN shares a correlation of 0.39.
Interestingly, this rise in crypto-affiliated companies' prices is a deviation from the indices as a whole. The stock markets, both Nasdaq 100 and S&P 500 index, share a slight negative correlation with Bitcoin -0.2 and -0.04 respectively.
In addition to Bitcoin's price recovery impacting altcoins positively, the optimism has also reached the stock market. Publicly traded companies listed on the Nasdaq 100 and the S&P 500 index affiliated with cryptocurrencies are noting a surge in their value.
However, it is worth noting that the crypto market is about to enter its final quarter with a large option expiration event set for September 29th. These events are often a source of high volatility as major players hedge their positions, roll out contracts for future expiration dates, etc. According to trading desk QCP Capital, the Bitcoin price is likely to correct into the $23,000 area to complete the trajectory corresponding with a Wave B, per the Elliot Wave theory.
Despite these potential bearish factors, including the Mt. Gox Bitcoin unlock and the event surrounding the failed crypto exchange FTX, QCP Capital remains optimistic for late 2023 and 2024. It suggests that the market would have hit bottom by mid-October this year and Bitcoin could begin to recover from a long winter.
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