Bitcoin & US stock markets

[Husires]

I try to understand whether we want to see a similar pattern between what is happening in the Bitcoin and stock market, and therefore we will begin to influence the variables that affect stocks such as raising the interest rate, US federal policies, treasury revenues, Exchange Rate Fluctuations?

Or that what happened in the last pattern is a coincidence and therefore we should not expect a correction if events occur, such as the Federal decision, to raise interest rates within the next two months.

NDX @ US - Nasdaq 100 Index - US Markets

DJI @ US - Dow Jones 30 Index - US Markets

BTCUSD @ FXCOM

[mk4]

Heads up: you can use tools like TradingView to check correlations.

And yea, there's a good amount of correlation as bitcoin has been trading like a tech stock; the only difference that bitcoin has more sort of 'violent' movements. Hence why I'm personally not buying much until the NASDAQ stops crapping itself.

https://www.tradingview.com/chart/TpE1GrGY/?symbol=BITSTAMP%3ABTCUSD

[GreatArkansas]

So for me, the recent dump on Bitcoin is nothing to worry about because it's just not Bitcoin or the cryptocurrency market, it's most of the market right now around the world.
That's why I am still calm. What I am also curious is which of them is the ones who start to dump then the other follows, it will be also a good signal but it seems they correlate and they move together at almost the same time.

[mk4]

So for me, the recent dump on Bitcoin is nothing to worry about because it's just not Bitcoin or the cryptocurrency market, it's most of the market right now around the world.
That's why I am still calm. What I am also curious is which of them is the ones who start to dump then the other follows, it will be also a good signal but it seems they correlate and they move together at almost the same time.

As far as I understand it (and probably a lot of traders will agree), it's either the S&P500 or the Nasdaq (though probably more of the latter). What I've noticed is that BTC has been following the price quite often like clockwork when it's the case that the S&P500/Nasdaq is up/down in good percentages at market open. It definitely sucks, but it is what it is.

[el kaka22]

Of course they are very related, because the reason why they dropped was very related as well. The resemblance comes from the fact that FED increased the interest rate, which means that all of the world got impacted from it and that was normal. I understand that there were situations where it is not a deal that impacts both of them the same in certain dates, but there are also situations where both of them are impacted the same as well.

For example when pandemic hit, both of them went down because it impacts them both and terribly, but when money was printed a lot, then both went up a lot because it was beneficial for both. These are the situations, sometimes both got affected equally.

[adaseb]

I think now the correlation is something like 90%. It’s highly correlated and one of the reasons why there is usually little movement until the stock markets opens.

What we are all waiting for is basically for it to decouple and it would single the end of the bear market. No idea when that will happen. Maybe when fed cuts rates ? Maybe when China reopens? Who knows.

For now it’s highly correlated.

[pooya87]

Or that what happened in the last pattern is a coincidence

It both is coincidence and it isn't!

It is a coincidence because there is simply no correlation between bitcoin and any market least of which US stock market. There has never been and there still isn't. Correlation shouldn't just happen when there is a dump. It should happen when there is rally too. For example you can't find any correlation when bitcoin price went from $30k to $70k while during most of that time stock market was still struggling!

But it is also not completely a coincidence because over the past couple of years (started from pandemic era) a lot of bitcoin trades are brainwashed into accepting that this newfound correlation exists! Consequently all those who have believed in the lie (that are a considerable percentage of the market participants) started to also have an eye on US stock market and are very quick at panic selling their bitcoins whenever they see the US stock market is crashing.
The more frequently this panic sell "coincidence" happens the more trades are going to join the bandwagon of panic selling hence creating an even bigger "coincidence".

I don't think this trend is going to break unless people start looking at the whole 13 years worth of history or we see all these panic sellers lose a significant amount of money as bitcoin price goes up next time the US stocks come crumbling down.

P.S. here is the lack of correlation I talked about and the reason why I call it an idiotic panic sell. This happened between July and November 2021

[Kemarit]

I think now the correlation is something like 90%. It’s highly correlated and one of the reasons why there is usually little movement until the stock markets opens.

What we are all waiting for is basically for it to decouple and it would single the end of the bear market. No idea when that will happen. Maybe when fed cuts rates ? Maybe when China reopens? Who knows.

For now it’s highly correlated.

I agree, the correlation now is more evident, maybe the picture is highlighted because we are in a bear market?

The Feds though just rate their rates so I don't see them cutting it in the next couple of months. Perhaps the biggest effect is still the ongoing war itself.

Nevertheless we can't really deny that there is correlation of bitcoin from all other traditional financial markets.

[lornadane]

So for me, the recent dump on Bitcoin is nothing to worry about because it's just not Bitcoin or the cryptocurrency market, it's most of the market right now around the world.
That's why I am still calm. What I am also curious is which of them is the ones who start to dump then the other follows, it will be also a good signal but it seems they correlate and they move together at almost the same time.

Who are you referring to and do they correlate with greeting in one direction?
But in my opinion they are not the same and are not in line even though the goal is the same.

[adaseb]

I think now the correlation is something like 90%. It’s highly correlated and one of the reasons why there is usually little movement until the stock markets opens.

What we are all waiting for is basically for it to decouple and it would single the end of the bear market. No idea when that will happen. Maybe when fed cuts rates ? Maybe when China reopens? Who knows.

For now it’s highly correlated.

I agree, the correlation now is more evident, maybe the picture is highlighted because we are in a bear market?

The Feds though just rate their rates so I don't see them cutting it in the next couple of months. Perhaps the biggest effect is still the ongoing war itself.

Nevertheless we can't really deny that there is correlation of bitcoin from all other traditional financial markets.

The issue with the fed is this. If the stock market crashes, they might not have a choice but to cut the rate to prevent the stock market crash. This is what some people are speculating.

Rates were only raised twice by 75bps and already we are in stock market bear territory. Inflation is still high. Most likely next print will either be higher or the same. They will need to still hike, if they hike what will happen to the stock market then? And crypto will also suffer.

[Dhaniii]

all markets are experiencing a downturn and that's not just bitcoin including worldwide stocks. That's why I was still calm and too panicked. some of them are starting to dispose of assets by exchanging it for a stable asset and then others follow suit, so that becomes a negative signal and it seems that the world markets look like they are correlated and they move together at almost the same point that they cannot switch other types of assets.

[fzkto]

Bitcoin has long begun to correlate with the stock markets, especially when there is a fall. You can probably score those times when the cryptocurrency market lived by different rules. Now the big guys, the funds, the corporations have come in. ETFs have appeared on the stock exchanges. I don't know where all this is going, but I guess the best times are coming to an end.

[Reid]

@pooya, thank you. I strongly agree with your opinion there.
But it seems inevitable as traditions cannot be erased easily like how Thanos snapped his fingers. They will keep on using other markets to connect it with the Bitcoin movement even if there is really none.
I see this daily in streaming application where they even try to explain it thoroughly as if they want to make sense out of it but at the end of the day, there's really nothing.
Sadly, they have many followers who might do it and that is why a connection will be seen.

[pooya87]

@pooya, thank you. I strongly agree with your opinion there.
But it seems inevitable as traditions cannot be erased easily like how Thanos snapped his fingers. They will keep on using other markets to connect it with the Bitcoin movement even if there is really none.
I see this daily in streaming application where they even try to explain it thoroughly as if they want to make sense out of it but at the end of the day, there's really nothing.
Sadly, they have many followers who might do it and that is why a connection will be seen.

Definitely. It is like halving where people think price is going to magically jump on the exact day that the block reward is cut in half so they buy bitcoin 2 months before the halving and sell a couple of days before the halving! Funny thing is that they always forget there was a hype right after the halving and price remains stable.
I agree that we can't change it but we have to continue fighting superstitions

[STT]

Theres a correlation in sentiment and leveraged money via the Dollar index.   In a harsh environment anything speculative will retract and alot of tech companies are valuing prospective earnings which is something under threat when the market considers a possible recession in future.   BTC relates to that general pullback so long as its not a yielding currency, its not completely or true in absolute way because there are operating businesses which make money via use of BTC or obviously alot of tech stocks are based on profitable operations (globally).
  The correlation is in less optimism of GDP expansion, US stocks suffer from inflation fears where as BTC generally is going to react positively but in this case its a long term reaction via growth as an alternative currency to transact.  So on multiple time frames comparisons will vary.

[adaseb]

Last trading day there was a decoupling with the correlation with Bitcoin and the stock market index. So either some crypto fund blew up or Bitcoin is just very bearish.

Usually when stocks go up so does Bitcoin. However stocks went up and Bitcoin traded sideways and then it started to sell off. Make no sense.

Basically if you tried to arb the correlation you would of lost money.