Lately, Bitcoin price has been showing record-high levels of correlation with traditional markets and on July 9 the correlation between the S&P 500 and BTC reached a new all-time high.<\/p>\n
Data from Skew shows that the one-year realized correlation reached 0.38 on Thursday, July 9 and this came after the metric had reached new highs earlier in the week.<\/p>\n<\/p>\n
Bitcoin - S&P 500 Realized Correlation. Source: Skew<\/p>\n
The correlation with traditional markets has been growing at a steady pace recently, with the one-year reaching consecutive new all-time highs. Data from Skew also shows that the 1 month figure also reached its all-time high of 0.78 on Wednesday, but has since dropped to 61.5.<\/p>\n
While Bitcoin has been showing increasing correlation with the stock market, the same cannot be said for gold which has surpassed $1,800 to set a new high not seen since 2011.<\/p>\n
A recent report by Krakens research department found that correlation with the precious metal has been declining. Bitcoins 30-day rolling correlation also hit a four-month low of -0.49, a level far below its one-year average of 0.24.<\/p>\n
The correlation between Bitcoin and the traditional stock market grew following the coronavirus outbreak and the March 12 crash to $3,750. A recent Cointelegraph research report suggested that this trend could end after the halving but the exact opposite has happened. This is possibly due to the continued economic consequences of COVID-19.<\/p>\n
While a strengthening correlation between Bitcoin and equities markets is said to be a sign that the asset class is maturing, the nature of unregulated Bitcoin derivative products makes it prone to long and short squeezes.<\/p>\n
Some analysts have suggested that Bitcoins correlation to traditional markets may signal that BTC is becoming increasingly represented across a wider range of traditionally structured portfolios and this would be a sign that adoption continues to occur.<\/p>\n
With the halving and all the hype surrounding it long past, Bitcoin price appears to have flattened. The digital asset reached a record low volatility, with the 10-day realized volatility reaching the 0.2 mark, a low not seen since November 2018.<\/p>\n<\/p>\n
Monthly Bitcoin volume trading into fiat or stablecoin. Source: CryptoCompare<\/p>\n
Bitcoins decreasing volatility is also occurring alongside decreasing trading volumes and recent data shows that the volume for the BTC-USDT and BTC-USD trading pairs fell by 56% and 44% in the month of June.<\/p>\n
As the price continues to find resistance at the $9,300 level, the change of a sharp downside correction continues to increase. For this reason, traders are viewing $9,500 as the short-term level Bitcoin price needs to break. Failure to do so increases the risk that the price could drop to or below the $8,000 level.<\/p>\n
This trend can be observed across crypto derivatives and spot products. In the month of June, derivatives volumes dropped by 35.7%, the lowest figure in 2020, and spot volumes dropped by 49.3%.<\/p>\n
Dwindling volumes, low volatility, strong correlation with the equities, and a decreasing correlation to gold all seem to bring a bearish outlook to Bitcoin price, especially since other safe haven assets are performing well.<\/p>\n
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Correlation Between Bitcoin Price and Stocks Reaches a New All-Time High - Cointelegraph<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Lately, Bitcoin price has been showing record-high levels of correlation with traditional markets and on July 9 the correlation between the S&P 500 and BTC reached a new all-time high. Data from Skew shows that the one-year realized correlation reached 0.38 on Thursday, July 9 and this came after the metric had reached new highs earlier in the week Continue reading