Twenty-three long days have gone since Bitcoin (BTC) last closed over $32,000, and the 10% surge that occurred on May 29 and 30 is already dissipating as BTC price retraces around $30,000. The return to $30,000 only underlines the strong link to conventional assets, as the S&P 500 likewise fell 0.6 percent over the same time.

According to Citi economist Jamie Fahy, lower corporate earnings might put pressure on the stock market as inflation rises and the Federal Reserve raises interest rates in the United States. Citi’s research letter to customers, as published by Yahoo! Finance, stated:

In a nutshell, the investment bank anticipates that deteriorating macroeconomic circumstances would limit company profitability, causing investors to reprice the stock market lower.

“We should be in some type of recession quite rapidly,” says Jeremy Grantham, co-founder and chief investment strategist of GMO, “and profit margins from a true high have a long way to fall.”

Because the connection to the S&P 500 remains very strong, Bitcoin investors are concerned that a possible stock market fall may result in a retest of the $28,000 level.

The correlation measure varies from a negative one, indicating that certain markets move in different ways, to a positive one, indicating flawless and symmetrical movement. A difference or absence of link between the two assets is denoted by 0.

The 30-day correlation between the S&P 500 and Bitcoin is at 0.88, which has been the average for the previous several months.

Bitcoin bears must push the price below $30,000 on June 3 in order to profit by $115 million. The bulls, on the other hand, need a surge over $33,000 to expand their winnings to $225 million.

According to Coinglass statistics, Bitcoin bears liquidated $289 million in leverage short bets on May 29. As a result, they have less margin to drive the price down in the near term.

With that stated, the most likely outcome is a tie, leading Bitcoin to trade around $31,000 ahead of the June 3 options expiration.

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