Bitcoin (BTC), and U.S. stock markets have shown negative correlations in recent times, Bitcoin moving often against the traditional market. Analysts and investors have taken note of this divergence, particularly as cryptocurrency markets enter a consolidation phase. Historically, shifts in this correlation—from negative to positive—have often signaled a bullish trend for Bitcoin.
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The changing dynamics of BTC and U.S. stock markets could be crucial in determining the direction the market will take. Investors closely monitor this relationship in anticipation of a possible breakout for Bitcoin.
Bitcoin Data suggests Potential Uptrend
The negative correlation between Bitcoin (BTC) and the U.S. stock market, particularly the S&P 500 (SPX), has become increasingly evident. Daan On X, a leading analyst and trader highlighted this phenomenon recently by overlaying Chart of BTC/USDT Futures with SPX Prices
He shows in his analysis that Bitcoin did not follow the traditional markets, like SPX. This divergence highlights the decoupling of these markets. Bitcoin is lagging the recovery in the broad stock market.
Caleb Franzen shared the data showing Bitcoin’s upward trend. negative correlation Major stock indices. Franzen indicates that at present, there is a -27% 90-day correlation of Bitcoin with the Nasdaq100 ($QQQ). This negative correlation shows that Bitcoin’s movement has been in the opposite direction as stocks have recovered.
Although periods of negative correlations between Bitcoin and stock prices aren’t necessarily bullish, history shows that such phases often lead to positive shifts in the market. The critical point for investors is to monitor a potential reversal of this correlation—when Bitcoin begins to move in tandem with the Nasdaq-100 ($QQQ) once again.
Bitcoin could be on the rise if Bitcoin’s relationship with tech stock stocks becomes positive. This would indicate a market that is strengthening and an uptrend. This change could be a crucial indicator to time potential market entry points.
BTC price below key indicators
Bitcoin is trading at $59350. This price is below the daily moving average of 200 days (MA), which stands at $62,915. Many analysts use this moving average to determine market trends. BTC’s price below the 200 MA daily is a sign of a downward trend or significant correction. Trading above the 200 MA indicates market strength, bullish momentum and a downtrend.
Bitcoin must reclaim its daily 200 MA, and close consistently above it. The traders and investors would be reassured that there is no change in the trend.
BTC currently hovers just below the psychologically significant level of $60,000. The market has been undergoing months of instability and unpredictability.
Bitcoin has to rise above $63,000 and retake the daily 200 MA, as well as surpass the high local of $62,729 on August 8th. The market would then be able to show a strong recovery.
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A failure to reach a closing price of $57.500 could lead to further downtrend pressures, possibly leading to levels below $50,000. It will be important to see if Bitcoin’s upward trend can continue or if there is more downward pressure ahead.
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Source: www.newsbtc.com