Rising correlation and possible exit from channel point to BTCUSD moving to level 72,000

The BTCUSD exchange rate has stabilized on Tuesday after an impulsive rise last week.

Since September 18, when the US Federal Reserve cut the rate for the first time since March 2020, the correlation between the cryptocurrency prices and US stocks has reached record levels. The 40-day correlation coefficient between the top 100 cryptocurrencies and the S&P 500 index of U.S. companies has stood at about 0.67. A higher ratio has not been recorded since the second quarter of 2022, when it exceeded 0.72.

Given the high correlation between cryptocurrency and traditional assets, investors are looking more frequently at conventional economic data.

As the Chicago Fed President Austan Goolsbee noted, the U.S. regulator seeks to achieve a ‘soft landing’ for the economy by keeping inflation under control without harming the labor market. In this context, he anticipates further easing of the monetary environment.

According to CME Group's FedWatch tool, investors are now pricing in another significant interest rate cut at the Fed's November meeting. A number of U.S. central bank officials, including Chairman Jerome Powell, are scheduled to deliver speeches in the coming days. On Friday, monthly data on the Personal Consumption Expenditures Index, a key inflation indicator for the Fed, is scheduled to be released.

Technical analysis of the BTCUSD rate shows the formation of a broad downward correction on the daily timeframe (D1). The price has been showing movement towards the channel resistance for the last two weeks. Fundamental data may increase the probability of breaking through this level and further growth of the cryptocurrency price. The volumes of the Moving Average of Oscillator indicator (with parameters 12, 26, 9) are increasing in the positive zone, supporting the growth signal.

Short-term prospects of BTCUSD value suggest buying, with the target at 72,000. Partial profit taking is recommended around the level of 68,000, and the Stop-loss should be set at 57,450.

Since the bullish trend is of a short-term nature, the trading volume should not exceed 2% of your total balance to reduce risks.