Bitcoin Struggles Near $87K as US Stocks Hit Record Highs
Bitcoin (BTC) traded near the $86,000 mark on Tuesday, oscillating within a tight range as US equities reached new all-time highs. The cryptocurrency struggled to surpass the $87,000 threshold, with traders noting significant liquidity clustered around that level, which can create friction in price movements. CoinGlass data showed the largest concentration of liquidation and liquidity near $87,000, with a ladder of ask orders extending down to approximately $86,500.
The broader market sentiment remained bullish, supported by record closes in major US indices. The S&P 500 rose 0.8% to 7,835 points, while the Nasdaq 100 and Nasdaq Composite also hit new highs. This reinforced the close relationship many investors observe between large-cap equities and liquid crypto assets like Bitcoin.
From a technical standpoint, the nearest widely tracked support area for Bitcoin was the 21-day simple moving average (SMA) near $83,500. CryptoQuant reported a modest positive correlation of 0.51 between Bitcoin and the S&P 500 as of October 2, marking its highest level since early June. However, this correlation did not translate into a clear breakout for Bitcoin, as the cryptocurrency faced resistance from concentrated liquidity around $87,000.
Analysts highlighted that the current equity rally, driven by shifting expectations around Federal Reserve policy, could influence Bitcoin's trading behavior. Mosaic Asset Company noted that market breadth remained weak, with only 25% of stocks trading above their 50-day SMA. This dynamic could make markets more sensitive to changes in rate expectations, potentially affecting Bitcoin's liquidity-driven price action.
Looking ahead, traders will be watching whether Bitcoin can clear the $87,000 liquidity pocket without quickly reversing. Key levels to monitor include the 21-day SMA at $83,500 for support and the Monthly signal invalidation threshold at $87,375 for resistance. The next development for Bitcoin may depend on whether it can overcome these technical hurdles while maintaining its correlation with the S&P 500.