The US stock market was in the red again today, continuing the malaise in the traditional financial market. Now the big question for us is of course whether the weak development of the stock market could also lead to the Bitcoin price falling.
Typically, the correlation (the correlation between price movements) between Bitcoin and the stock markets is high. Do we have to worry?
Bitcoin seems stable
Despite the traditional financial market taking another hit today, Bitcoin’s price appears to be stable. Over the past 24 hours, the price has remained virtually unchanged and Bitcoin is at $34,332.
These are races that not so long ago we could only dream of. A Bitcoin bull market seemed far away, but now optimism is high and it seems to have everything to do with the arrival of a Bitcoin ETF in the United States.
As Bitcoin weathers the crisis, the US S&P 500 is down more than 2% in the past five days. This may not seem like a huge drop, but for traditional markets, 2% is a huge price change.
If we look at the long term, it’s not too bad. The S&P 500 is up about 10% since the beginning of the year, but this gain obviously pales in comparison to Bitcoin’s massive price explosion of over 100% in 2023.
Correlation between Bitcoin and the disappearance of stocks?
Based on the chart below, the correlation between Bitcoin and the S&P 500 appears to have disappeared completely. At the time of writing this is -0.65%. This means that they move in opposite directions from each other and we can see this in the graph below.
What does this mean for Bitcoin? This means that the market seems to recognize that Bitcoin is a special asset. That Bitcoin is an asset completely separate from the traditional financial system and that we may be dealing with a new safe haven.
Is Bitcoin the new gold? It may be too early to draw this conclusion, but if Bitcoin continues like this, there will be more and more investors who will value the digital currency in this way.
Therefore, Bitcoin’s current strength, while the stock market is struggling, makes it very optimistic for the future of Satoshi Nakamoto’s creation.
Source: BTC Direct
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
