On Oct. 4 and 5, Bitcoin 

BTC

$16,936

 took another step through the $20,000 mark, bringing the price above a long-term descending trendline that stretches all the way back to April 22 or Nov. 15, depending on one’s style of technical analysis.

Some traders might be feeling a bit celebratory now that the price trades outside of the descending trendline, but have any relevant metrics or macro factors changed enough to support a bullish point of view for Bitcoin price?

In reality, BTC price simply “consolidated” its way through the trendline by trading in a sideways manner where price has been range bound between $18,500 and $24,500 for the past 114 days.

Direction-wise, Bitcoin and Ether 

ETH

$1,265

 tend to trade in tandem with equities, and BTC’s Oct. 4 rally to $20,365 comes as the Dow, S&P 500 and Nasdaq closed the day with 2% to 3% gains.

As a reminder that short-term price action is not necessarily reflective of a larger trend change, Coin Metrics said:

“Correlations among BTC, ETH and with the S&P 500 have increased recently as the benchmark index fell in price to 3600, which had not been breached since December of 2020.”

Despite the Oct. 4 “all-in rally” in stocks and crypto markets, larger fears of global runaway inflation, rising interest rates and other economic concerns continue to suppress investors’ appetite for interacting with markets, a fact that is clearly reflected in Q3 results.

On Oct. 5, OPEC announced plans to cut oil production by 2 million barrels per day, which is roughly equivalent to 2% of the global oil demand. Oil stocks rallied at the announcement, but the White House is likely concerned that the reductions will complicate the Federal Reserve’s fight against inflation and possibly contribute to higher petrol prices.

Generally, institutional investors like Citi and Goldman Sachs expect volatility in equities markets to continue, and both have revised down their end-of-year targets for the S&P 500, while investors are still predicting a down year in 2023.

All said, inflation remains high across the globe, corporate earnings expectations are being adjusted to the downside, and the Fed appears confidently resolute in its current plans for reducing inflation.

None of these developments are conducive to boosting investors’ risk sentiment, and given Bitcoin’s correlation with equities markets and sensitivity to bearish economic news flow, it seems unlikely that BTC breaking through the descending trendline is a sign of a trend change.

A more convincing development would be a range-break and a series of daily closes above $25,000.