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January 22, 2016, 09:30:57 PM |
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Over the past year, BTC/USD price has not correlated strongly to other asset classes or currencies.
It does, however, appear to function at times as a liquidity indicator, of large-scale flows of capital into and out of risky assets.
The Hearn break in BTC earlier this week coincided with a washout in global equity markets.
The subsequent bounce presaged a recovery in equity prices.
As the trading week concluded, BTC broke below 400 again, and similarly, the CAD, SGD, and NZD all pulled back, and the rally faded in many stocks.
There are similar relationships to be observed during the run-up in late '13, the rally in July '15 and collapse in Aug '15, the rally in Dec '15.
I'd like to discuss/explore BTC/USD price as an indicator of broader liquidity (perhaps useful as a speculation tool) or simply economic confidence/sentiment (thus useful for market timing).
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