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Bitcoin is finally breaking its correlation with the stock market, which has been persisting despite its recent uptrend’s strength.
An example of this correlation’s lingering effects can be seen while looking towards yesterday’s selloff, with the rejection at $13,800 coming about almost instantly after investors saw a sharp decline in stock futures.
Although yesterday was a somewhat rough day for Bitcoin, it quickly shook off the weakness created by the recent turbulence within the stock market and has since been rally higher.
One on-chain analyst is now noting that the benchmark cryptocurrency is now starting to flash some of its first signs of posting a macro decoupling from the stock market.
This is being driven by one group of investors in particular, as he notes that new retail entrants into the market have been backing this recent uptrend.
The confluence of institutions and corporations buying Bitcoin, as well as retail investors, signals that serious upside could be imminent in the near-term.
Bitcoin Rallies Back Towards Key Resistance
Bitcoin is in the process of surging back up towards its key $13,800 resistance level that sparked the recent selloff that sent it reeling down by $1,000.
At the time of writing, Bitcoin is trading up just over 2% at its current price of $13,500. This marks a massive surge from its recent lows of $12,800 set at the bottom of yesterday’s selloff.
$13,800 is a region of historical significance, as this is where the 2019 rally in late-June peaked before BTC posted a “blow-off top” and began plunging lower.
If this level is broken, then the crypto could see a sharp rise that sends it towards its all-time high.
On-Chain Analyst: BTC Flashing First Signs of Decoupling from Stock Market
Willy Woo – a respected on-chain analyst – explained in a recent tweet that Bitcoin and the stock market are now showing their first signs of macro de-coupling behavior.
He notes that this is being driven by an influx of new retail investors providing serious price support.
“First signs of de-coupling behaviour spotted between BTC and stocks. Buying from an influx of new users provides price support preventing speculators from trading the correlation downwards. NVTP approximates a valuation for BTC with organic investor velocity on the blockchain.”
Image Courtesy of Willy Woo.
How Bitcoin responds to another potentially imminent rest of $13,800 should provide some serious insights into its mid-term outlook.
Featured image from Unsplash. BTCUSD pricing data from TradingView.
