Bitcoin Finds Solid Support At Current Prices
Also Bitcoin’s Correlation With The Nasdaq Falls Below Average & Fed Chairman Warsh Is Ramping Up The Hawkish Sentiment
Welcome to Ecoinometrics’ Friday edition.
Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis.
Today we’ll cover:
Bitcoin Finds Solid Support At Current Prices
Bitcoin’s Correlation With The Nasdaq Falls Below Average
Fed Chairman Warsh Is Ramping Up The Hawkish Sentiment
The macro environment has become more challenging for Bitcoin over the past two weeks. Especially the Federal Reserve is sounding more hawkish and bond yields continue to rise. Yet Bitcoin has remained stable. The question now is whether the market is becoming more resilient or simply waiting for its next move.
In case you missed it, here are the other topics we covered this week:
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The Ecoinometrics Decision
Bitcoin Finds Solid Support At Current Prices
Bitcoin’s price hasn’t done much over the past two weeks. But what’s happening below the price action is much more encouraging.
We’ve gone from seeing the first signs of improving demand to having Bitcoin settle into a solid neutral ETF flow regime. That tells us buyers are now consistently absorbing selling pressure, providing meaningful support around current prices.
That’s the shift we were waiting for. It suggests Bitcoin is becoming more resilient, even as investors digest a more hawkish Fed and higher Treasury yields.
Now this is still a stabilization call rather than a recovery call. We’d need to see sustained time in a strong inflow regime before talking about a durable uptrend and we haven’t seen that since May.
As long as ETF demand stays around these levels, the probability of a sharp short-term decline has fallen materially. The market is no longer fighting persistent selling pressure, but it still lacks the demand needed to push prices decisively higher.
Bitcoin’s Correlation With The Nasdaq Falls Below Average
One of the defining characteristics of Bitcoin bear markets is that Bitcoin tends to trade much more like the Nasdaq on a day-to-day basis. When risk appetite deteriorates, macro forces dominate and both assets often move together.
That’s why the recent decline in their correlation stands out. Bitcoin is still in a bear market, yet its three-month correlation with the Nasdaq has fallen below its long-term average.
Now that isn’t evidence of a true decoupling. Bitcoin still behaves very much like a macro risk asset and we see little reason to expect that to change anytime soon.
One likely explanation is that the AI boom has continued pushing large technology stocks higher while Bitcoin has remained stuck in a different phase of the cycle. That has created a noticeable divergence in returns without fundamentally changing Bitcoin’s place in the broader risk-on complex.
For now, we see this as an early sign of changing market dynamics rather than a structural break. If the correlation continues to weaken over the coming months, that story becomes much more interesting.
Fed Chairman Warsh Is Ramping Up The Hawkish Sentiment
Kevin Warsh isn’t giving markets much forward guidance. He’s been quite explicit about that. But that doesn’t mean investors are flying blind.
Our Fed Communication Index measures the tone of every FOMC press conference, and this week’s meeting shows a clear shift toward a more hawkish stance. The move isn’t dramatic, but the direction is unmistakable.
Inflation remains the Fed’s primary concern. Warsh has repeatedly argued that tighter financial conditions can come from both higher interest rates and a smaller balance sheet, and he has openly welcomed the market’s recent repricing of long-term yields.
So even without forward guidance the message is fairly straightforward. The Fed isn’t promising another rate hike at a set time but it is signalling that financial conditions should remain tight until inflation is convincingly under control.
That remains a difficult backdrop for Bitcoin. If today’s hawkish tone eventually turns into higher rates or further balance-sheet reduction, the odds of a prolonged drawdown increase materially.
That’s it for today. Thanks for reading.
Cheers,
Nick
P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis.
Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions.
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