Information reveals the Bitcoin correlation with S&P 500, and therefore the inventory market, has now set a brand new all-time excessive (ATH).
Bitcoin Correlation With S&P 500 Reaches New Excessive
As identified by an analyst in a CryptoQuant post, the BTC correlation with the inventory market is at the moment at an all-time excessive, additional damaging the “protected haven” narrative.
The “Bitcoin correlation with S&P 500” is an indicator that measures how strongly the worth of BTC reacts to volatility in S&P 500, in addition to the path of the response.
When the indicator has values better than zero, it means there’s a constructive correlation between the inventory market and the worth of the crypto in the mean time. “Constructive” right here implies that BTC strikes in the identical path as S&P 500.
Alternatively, correlation values lower than zero indicate that BTC reacts to S&P 500’s worth adjustments by shifting in the other way.
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Values of the indicator precisely equal to zero naturally imply that there isn’t a correlation between the 2 property. Now, here’s a chart that reveals the development within the S&P 500 and Bitcoin correlation for the reason that yr 2013:
The indicator's worth over the historical past of the crypto | Supply: CryptoQuant
As you’ll be able to see within the above graph, the correlation between Bitcoin and S&P 500 swung between constructive and adverse whereas remaining low for essentially the most a part of BTC’s historical past.
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Nevertheless, since late 2019-early 2020, the 2 property have turn into strongly, positively correlated. Throughout 2020, the metric had a crash as a result of COVID dump, however the indicator sharply rose through the 2nd half of 2021 and 2022 to this point.
The correlation between the Bitcoin and the inventory market has now set a brand new all-time excessive (ATH) of +0.5468 this month.
Such excessive correlation between the property has additional put a dent on the narrative of “digital gold” because the crypto is not the protected haven it as soon as was.
On the time of writing, Bitcoin’s worth floats round $39k, down 12% within the final seven days. Over the previous month, the crypto has gained 10% in worth.
The beneath chart reveals the development within the worth of BTC over the past 5 days.
BTC's worth appears to made some restoration over the past couple of days | Supply: BTCUSD on TradingView
Just a few days again, the worth of Bitcoin plunged down, touching as little as $36.4k. Since then, the worth of the coin has proven some restoration, breaking above the $39k degree once more in the present day. In the intervening time, it’s unclear whether or not this contemporary uptrend will final.
Featured picture from Unsplash.com, charts from TradingView.com, CryptoQuant.com