Bitcoin correlates with S & amp; P500 …


Bitcoin/Altcoin Correlation Explained – Part 1

Bitcoin correlates with S & amp; P500 ...

Bitcoin correlates with S&P500, but only at certain points

  • Index S&P 500 found support above 200-day MA.

  • The price has made a bullish breakout of the falling wedge.

  • Correlation between Bitcoin and SPX is noticeably intensified during the moments of sharp movements in the market.

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Bitcoin rate (BTC) and the dynamics of the stock index S&P500 (SPX) show a high correlation with each other, especially at moments of important trends.

Bitcoin correlates with S & amp; P500 ...

Long term schedule

Index S&The P 500 (SPX) is trading at $ 3,058 at the time of writing, between the closest support and resistance levels at $ 2,950 and $ 3,230, respectively.

The index also trades above the 200-day moving average (MA), using it as support. The price broke through this line on May 20, and then returned on June 15 to test this MA for strength as a support, forming a hammer candle on the chart. This is a bullish signal and promises the market continued growth..

However, the index still needs to approach the February highs, otherwise it may turn out that the entire move from the bottom of March 23 was just a correction after the fall.

Current bullish breakout

A likely falling wedge can be seen on the short-term chart, the upper border of which was recently broken. Prior to this breakout, the price recovered above the $ 3040 minor support area that had previously been broken.

Bitcoin Correlates with S & amp; P500 ...

As a rule, if the price falls below the support area, but cannot gain a foothold at the low levels reached, this often has bullish consequences and can warn of a trend reversal.

However, there is still resistance in front of SPX is represented by the 400-hour MA, which alternately played the role of both support and resistance within this wedge. When the market approves it as support, it will be able to launch growth in the direction of the above resistance areas.

Crypto trader @LSDinmycoffee has a similar opinion. He shared a chart on Twitter showing that the SPX is following a fractal that should bring the price to $ 3,200. This is quite consistent with the results of our analysis, coinciding with the resistance we indicated..

How can the dynamics of the traditional stock index and the cryptocurrency be interconnected? Join the discussion in our Telegram channel Рand you will find out everything!

Correlation with bitcoin

The issue of the correlation of cryptocurrency and stock markets continues to be the subject of fierce discussions. Before the May halving, analysts warned that bitcoin is no longer dependent on stocks and is turning into an “uncorrelated asset.” Meanwhile, last week we drew your attention to the fact that the correlation between bitcoin and S&P 500 is close to record values.

If we compare the dynamics of the SPX index and the BTC rate, we can find a very high degree of correlation, which is confirmed by the histogram at the bottom of the graph. After the June 23 decline, the correlation between the two assets was 0.6-1, with a value of ‘1’ being considered a perfect correlation.

An interesting fact attracts attention. It seems that the coefficient of this correlation tends to rise noticeably during periods of rapid market movements. In this case, it does not matter in which direction such a movement occurs – the coefficient will still be higher than during periods of relative price stability and trading in the range.

Bitcoin correlates with S & amp; P500 ...

This is especially noticeable in the example of two 5-day periods beginning June 6 and 15, when the correlation coefficient dropped below zero..


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