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 present at an all-time excessive, additional damaging the “secure haven” narrative.
The “Bitcoin correlation with S&P 500” is an indicator that measures how strongly the value of BTC reacts to volatility in S&P 500, in addition to the path of the response.
When the indicator has values higher than zero, it means there’s a optimistic correlation between the inventory market and the value of the crypto for the time being. “Optimistic” right here implies that BTC strikes in the identical path as S&P 500.
However, correlation values lower than zero suggest that BTC reacts to S&P 500’s worth adjustments by transferring in the other way.
Values of the indicator precisely equal to zero naturally imply that there is no such thing as a correlation between the 2 belongings. Now, here’s a chart that reveals the development within the S&P 500 and Bitcoin correlation because the 12 months 2013:
The indicator's worth over the historical past of the crypto | Supply: CryptoQuant
As you possibly can see within the above graph, the correlation between Bitcoin and S&P 500 swung between optimistic and adverse whereas remaining low for probably the most a part of BTC’s historical past.
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Nevertheless, since late 2019-early 2020, the 2 belongings have turn out to be strongly, positively correlated. Throughout 2020, the metric had a crash because of the COVID dump, however the indicator sharply rose in the course of the 2nd half of 2021 and 2022 thus far.
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 belongings has additional put a dent on the narrative of “digital gold” because the crypto is now not the secure haven it as soon as was.
On the time of writing, Bitcoin’s price floats round $39k, down 12% within the final seven days. Over the previous month, the crypto has gained 10% in worth.
The under chart reveals the development within the worth of BTC during the last 5 days.
BTC's worth appears to made some restoration during the last couple of days | Supply: BTCUSD on TradingView
A number of days again, the value 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 as we speak. In the mean time, it’s unclear whether or not this recent uptrend will final.
Featured picture from Unsplash.com, charts from TradingView.com, CryptoQuant.com