A well-known crypto trader and analyst says Bitcoin (BTC) is likely about to break out above its current trading range as it decorrelates with the stock market.
The pseudonymous trader known as Kaleo tells his 476,000 Twitter followers that he’s watching Bitcoin, not priced in USD, but against the S&P 500 index (SPX).
By looking at Bitcoin versus SPX (BTC/SPX), Kaleo says a trader can get a clearer look at BTC’s price action and where it may be headed next. For instance, the analyst highlights that BTC/SPX never formed the double top pattern that BTC/USD printed in November of 2021, which caught many traders off guard.
“An interesting pair to watch is BTC vs SPX.
The chart is 10x cleaner than BTCUSD, shows clear support at the base ranges above 2017 [high] support, and much stronger macrostructure (no false breakout/all-time high in Oct/Nov).”
Last week, the Kaleo pointed out that Bitcoin was largely decorrelated to SPX, a rare occurrence after many months of trading in unison.
“Also fun watching the price action divergence in SPX/BTC today
Bitcoin has basically traded as an SPX proxy in recent memory, so any outperformance is always entertaining.”
Zooming out, the trader sees BTC/SPX breaking out higher, raising the likelihood of Bitcoin rallies.
“It looks pretty evident this range will break higher.”
Kaleo also entertains the possibility of Ethereum (ETH) breaking out against the S&P 500. He references BitMEX founder Arthur Hayes’s recent prediction that ETH would be trading north of $10,000 by year-end.
“What if Arthur is right?”