Yesterday the Russell 2000 index set A new all-time high of 2798 points, as investment in small-cap stocks continued to pour in. The index later closed at 2792,96.
This month alone, small-cap stocks are up 12% and more than 16% from their Middle East war-related lows.
Data from finance.yahoo
Analysts notedThe Russell 2000 index broke through a resistance zone that had held for five years. Historically, the index often moved in a four-year cycle. This time, the breakout took five years, making this move especially noteworthy.
The chart structure shows a long base followed by a confident breakout to new highs. This typically indicates that buyers have absorbed excess supply and pushed the price into the price formation stage.
This move clearly shows that when long resistance is broken, trend following flows often emerge and fuel the momentum.
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Ash Crypto analyst noted that the index remains one of the strongest indicators of risk assets, often followed by ETH and altcoins.
Crypto Tice call this movement is a trigger for Bitcoin, believing that liquidity began to flow into assets with higher betas. In this situation, small-cap stocks move first, followed by cryptocurrencies.
The logic is based on risk rotation. Investors often move from cash to large-cap stocks, then to small-cap stocks, and then to speculative assets. If this pattern plays out, altcoins stand to benefit the most, as they typically react more strongly than their peers. Bitcoin, during periods of strong growth in risky assets.
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User Swissblock looked on the situation from the other side: this year Bitcoin demonstrated exceptional strength against the VIX. During geopolitical tensions, BTC performed well, despite rising volatility. In the latest rebound, BTC’s price held steady despite the decline in the VIX.
According to Swissblock, Bitcoin may not have to wait in line after stocks and will attract investors on its own.
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