Bitcoin’s Correlation With US Stocks
Recent data indicates a significant shift in Bitcoin’s correlation with US stocks. This change is noteworthy because Bitcoin and these stocks previously showed a positive correlation, which influenced both Bitcoin and the broader crypto market positively.
- Data suggests that Bitcoin’s correlation with the Nasdaq 100 and S&P 500 has declined to -0.78 and -0.83, respectively.
- This negative correlation implies that Bitcoin and these assets tend to move in opposite directions.
Bitcoin’s Decoupling from US Equities
For some time now, Bitcoin has been on a downward trend while the Nasdaq 100 and S&P 500 have experienced significant rallies.
- The Nasdaq 100 and S&P 500 have seen growth of over 7% and 4% in the past month, whereas Bitcoin has dropped by over 15% during the same period.
- A report from Bloomberg highlights the diminishing correlation between Bitcoin and US equities, attributing this to substantial selling pressure faced by Bitcoin.
Selling Pressure Influencing Bitcoin’s Correlation
The selling pressure on Bitcoin has caused it to detach from the movements of US stocks. At the beginning of June, the correlation between Bitcoin and the Nasdaq 100 and S&P 500 was positive but has since decreased.
- Bitcoin miners selling a significant amount of their holdings contributed to this decline in correlation.
- The German government’s selling of seized bitcoins further intensified the selling pressure on Bitcoin.
Crucial Moment for Bitcoin and Equities
Bitcoin and US stocks face a critical test with the upcoming release of the US Consumer Price Index (CPI) inflation data on July 11. This report is anticipated to show a cooling off of inflation, potentially leading to interest rate cuts.
- Positive inflation data could trigger a price rebound for Bitcoin, which is currently attempting to regain $60,000 as a support level.
- Crypto analyst Justin Bennett cautions that Bitcoin must stay above $57,800 to avoid a drop to $50,000.
Hot Take: Bitcoin’s New Correlation Trend
As Bitcoin’s correlation with US stocks weakens, the cryptocurrency faces new challenges and opportunities. Stay updated on the latest market insights to navigate this evolving landscape effectively.
Sources: Bitcoinist, Bitcoinist, IntoTheBlock, IntoTheBlock, Bloomberg, Bitcoinist, Bitcoinist, Bitcoinist, Bitcoinist, Bitcoinist, CNBC, Bitcoinist, x.com
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