Bitcoin Falls Out Of Step With US Equities, What This Could Mean For The Crypto Market

Scott Matherson

11 months ago

3 mins read

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Recent data shows that Bitcoin has completely detached from US stocks. This is significant considering how the flagship crypto and these stocks had a positive correlation before now, which undoubtedly positively impacted Bitcoin and the broader crypto market.

Bitcoin Has No Correlation With US Stocks

Data from the market intelligence platform IntoTheBlock shows that Bitcoin’s correlation with the Nasdaq 100 and S&P 500 has dropped to -0.78 and -0.83, respectively. This means that Bitcoin and these assets have a strong negative correlation, with their prices tending to move in opposite directions.

Indeed, that has been the case for a while now, seeing as the flagship crypto has been on a major downtrend for a while now. On the other hand, the Nasdaq 100 and S&P 500 have continued to enjoy considerable rallies. Data from IntoTheBlock shows that the Nasdaq 100 and S&P 500 are up over 7% and 4% in the last month, while Bitcoin is down over 15%.

A Bloomberg report also highlighted the “collapsing” correlation between Bitcoin and US equities and attributed this decline to the massive selling pressure the flagship crypto is experiencing. Joshua Lim, co-founder of trading firm Arbelos Markets, told Bloomberg that this selling pressure caused by the likes of the German government has “put a cap” on Bitcoin’s upside while these US stocks trade at all-time highs.

Data from IntoTheBlock shows that it is indeed this selling pressure that has caused Bitcoin to detach from these US stocks. At the start of June, Bitcoin’s correlation with the Nasdaq 100 and S&P 500 was at 0.86 and 0.73, respectively. However, this strong positive correlation began to drop just as Bitcoin miners began to offload a significant amount of their holdings. Bitcoinist reported that these miners sold over 30,000 BTC in June.

Bitcoin also witnessed increased selling pressure towards the end of June thanks to the German government, which began to offload some of the bitcoins seized from the pirated movie Movie2k. This selling pressure hasn’t slowed, as the German government has continued its selling spree this month.

Moment Of Truth For BTC And The Stock Market

Bitcoin and US stocks will again be tested when the US Consumer Price Index (CPI) inflation data is released on July 11. The much-anticipated report is expected to show that inflation in the country is cooling off, further strengthening the case for interest rate cuts. Such development is undoubtedly bullish for these assets, especially Bitcoin and the broader crypto market.

In the short term, positive inflation data is expected to spark a rebound for Bitcoin’s price, which is currently trying to reclaim $60,000 as support. Crypto analyst Justin Bennett warned that Bitcoin needs to hold above $57,800 or risks dropping to as low as $50,000.

Bitcoin price chart from Tradingview.com — BTC fails to hold $59,000 | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

Scott Matherson

Scott Matherson is a prominent crypto writer at NewsBTC with a knack for capturing the pulse of the market, covering pivotal shifts, technological advancements, and regulatory changes with precision. Having witnessed the evolving landscape of the crypto world firsthand, Scott is able to dissect complex crypto topics and present them in an accessible and engaging manner. Scott's dedication to clarity and accuracy has made him an indispensable asset, helping to demystify the complex world of cryptocurrency for countless readers.

Scott’s experience spans a number of industries outside of crypto including banking and investment. He has brought his vast experience from these industries into crypto, which allows him to understand even the most complex topics and break them down in a way that is easy for readers from all works of life to understand. Scott’s pieces have helped to break down cryptocurrency processes and how they work, as well as the underlying groundbreaking technology that makes them so important to everyday life.

With years of experience in the crypto market, Scott began to focus on his true passion: writing. During this time, Scott has been able to author countless influential pieces that have drawn in millions of readers and have shaped public opinion across various important topics. His repertoire spans hundreds of articles on various sectors in the crypto industry, including decentralized finance (DeFi), decentralized exchanges (DEXes), Staking, Liquid Staking, emerging technologies, and non-fungible tokens (NFTs), among others.

Scott’s influence is not just limited to the countless discussions that his publications have sparked but also as a consultant for major projects in the space. He has consulted on issues ranging from crypto regulations to new technology deployment. Scott’s expertise also spans community building and contributes to a number of causes to further the development of the crypto industry.

Scott is an advocate for sustainable practices within the crypto industry and has championed discussions around green blockchain solutions. His ability to keep in line with market trends has made his work a favorite among crypto investors.
In his personal life, Scott is an avid traveler and his exposure to the world and various way of life has helped him to understand how important technologies like the blockchain and cryptocurrencies are. This has been key in his understanding of its global impact, as well as his ability to connect socio-economic developments to technological trends around the globe like no one else.

Scott is known for his work in community education to help people understand crypto technology and how its existence impacts their lives. He is a well-respected figure in his community, known for his work in helping to enlighten and inspire the next generation as they channel their energies into pressing issues. His work is a testament to his dedication and commitment to education and innovation, as well as the promotion of ethical practices in the rapidly developing world of cryptocurrencies.

Scott stands steady in the frontlines of the crypto revolution and is committed to helping to shape a future that promotes the development of technology in an ethical manner that translates to the benefit of all in the society.

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