Bitcoin showing similarities to small caps as it struggles to break through $70,000, says Wolfe Research

Bitcoin has been struggling to break out of its narrow range and reach new highs, and there doesn't appear to be much hope for the cryptocurrency's price in the near term, according to Wolfe Research. “Bitcoin continues to demonstrate its inability to successfully get through that stubborn $70k resistance level,” Wolfe's Rob Ginsberg said in a note Wednesday. “It's the same area where price stalled out in 2021 before going onto fall some 50% from the peak over the next three months” — before bitcoin hit another all-time high that year . “It reminds us of another group that has been unable to overcome its own resistance level … small caps,” he continued. “The two traded quite closely for years. Rates going higher were bad for both, and we saw investors treat them with similar risk appetites. Now, bitcoin has retested its highs while small caps have barely proved they can stay above $2,000 in [the Russell 2000 ].” BTC.CM= .RUT 6M mountain Bitcoin and Russell 2000 Bitcoin has been meandering in the $60,000 level since the beginning of March. It hit its record of $73,797.68 on March 14 and has briefly dipped to the $59,000 level a couple of times. Two key upside catalysts — the bitcoin ETF approvals and the halving — are behind the market now. Additionally, expectations of a rate cut have been pushed back , with some saying there's a risk that the Federal Reserve may not cut at all until 2025. Ginsberg said the long-term outlook for bitcoin is still good, but that the pullback phase from its recent record could drag on for a while. He expressed doubt that the cryptocurrency would succeed if equities continue to struggle. All of the major stock indexes are down for the month, and the small-cap Russell 2000 is tracking for a deeper loss of about 6%. “We have a tough time seeing equities rollover and bitcoin diverging and shooting higher,” Ginsberg said. “While we still feel it makes sense to remain a bull over the long term, we simply are not seeing those same kind of compelling signals over the near term.” —CNBC's Michael Bloom contributed reporting.