Clemente added that the price could further slip due to a “macro capitulatory event.” The analyst, however, argued that in an event where BTC's value became significantly low, a rally could bring the price up swiftly.
In the U.S., a large volume of BTC trades takes place on Coinbase. Clemente noted a “strong” institutional demand for BTC at the crypto exchange platform.
“The reasoning behind that is because that’s where a lot of these US-based institutions operate because Coinbase has done a lot of work on the compliance side and regulatory side and they’re a publicly traded company,” Clemente said.
“So a lot of these United States-based firms feel more comfortable operating on Coinbase versus an overseas exchange like Binance or KuCoin or any of these other exchanges.”
BTC to see volatility
Although BTC/USD trade fluctuated following the release of the U.S. September inflation data, by Sunday, the token stayed close to its usual range of $19,000. Data showed that the market was down 1.5 percent at the end of last week compared to the beginning of October.
The low volatility of BTC became a topic for discussion last week as several experts said this condition was not good for the market. Yassine Elmandjra, an analyst at ARK Investment Management, said that low volatility was unfavorable on “low volume.”
Price stabilization in this market is partially caused by more institutions investing in the assets. In a selloff, the stabilized price might cause the market to see a steep downward trend at a fast rate.
“So while low volatility is perhaps an indication that Bitcoin is becoming more boring and less contrarian, low volatility on low volume might not be great for Bitcoin,” Elmandjra said.
Some analysts, including Eight CEO Michaël van de Poppe, said it was a “matter of time” until volatility returned to the BTC market. The crypto community is waiting for the BTC market to see a downward trend, but Poppe said that the likelihood for BTC to show an upward trend had increased.
BTC, stock market correlation
More crypto investors are observing the fluctuation in the traditional stock market as a number of analysts have suggested a correlation between the two financial markets.
Last week, Nasdaq Composite and the S&P 500 lost 3.11 percent and 1.55 percent, respectively. Nasdaq closed at 10,321.39 on Friday, falling 3.08 percent, with the drops in the shares of Lucid Motors and Tesla being the main contributors to its fall. Meanwhile, the S&P 500 ended Friday’s trading at 3,583.07, slipping 2.37 percent, the index’s seventh consecutive loss.
Among the three major indices, the Dow was the only one seeing a gain, increasing by 1.15 percent. On Friday, however, it closed at 29,634.83, losing 403.89 points or 1.34 percent.
DataDash founder Nicolas Merten said that Nasdaq’s downfall had been a prerequisite to bear markets in the tech industry in 2000 and 2008. Merten added that BTC had never experienced this type of economic situation, and thus investors should “expect much more pain to come.”
Federal Reserve policies heavily influence the traditional stock market. UBS chief investment officer Mark Haefele said that to sustain a rally in the equity market, the Fed needed to do a “policy pivot,” which was unlikely due to the inflation rate.