functioning of prices, bitcoin and other crypto

[cattu04]

Hi everyone. Starting from the fact that I am almost totally ignorant of the subject, I wanted to know from some competent person if there are any macroeconomic data that
cause an almost immediate consequence on the price of cryptocurrencies. I also wanted to know if, by the same principle, there are "fundamental" data on individual cryptocurrencies, which publications cause an immediate
variation in the market. What I'm interested in is understanding if there is any correlation, even if minimal, as variation of  0.x %.
Thanks in advance

[Tytanowy Janusz]

In short term bitcoin price (so as every other crypto) react of every move of sp500. I've shown it in this thread:

https://bitcointalk.org/index.php?topic=5233946.msg54057265#msg54057265

The correlation is sometimes stronger sometimes weaker. What type of news push sp500? Whatever Wall Street bealive in currently. There was a period when it was the phases of the moon (not a joke), President Trump's tweets, Elon Musk's tweets, and now every grunt of Jerome Powell at the Fed meetings. So if you want to create a list of news/price action type events, I would start with the FED interest rate announcement, the unemployment rate announcement in the USA, etc.

[Edwardard]

In short term bitcoin price (so as every other crypto) react of every move of sp500.

We all assume the same thing but still its quite funny if you check btc and spx's chart, but look quite different in every time frame (atleast to me). Maybe btc over reacts thats why ? Currently spx is not very far from reaching a new ATH but btc still got a long way to go

The correlation is sometimes stronger sometimes weaker.

This I need to understand why the correlation shifts direction everytime. Who does this and why?

[Tytanowy Janusz]

In short term bitcoin price (so as every other crypto) react of every move of sp500.

We all assume the same thing but still its quite funny if you check btc and spx's chart, but look quite different in every time frame (atleast to me). Maybe btc over reacts thats why ? Currently spx is not very far from reaching a new ATH but btc still got a long way to go

The correlation is sometimes stronger sometimes weaker.

This I need to understand why the correlation shifts direction everytime. Who does this and why?

I see it this way.

30% of bitcoin investors/traders think of bitcoin as digital gold.
40% of bitcoin investors/traders think of bitcoin as a risky asset. Innovative startup. Nasdaq on steroids
10% of bitcoin investors/traders think bitcoin is a future of money and a fiat replacement.
20% of bitcoin investors/traders don't know what bitcoin is. Just bought because its growing

The percantege change based on bitcoin adoption and media manipulation.

From the other side:

X% of bitcoin investors/traders do DCA no matter what.
Y% just daytrade based on news
Z% swing trade long trends
N% just hodl

So when there is a bullish long term signal for gold ... digital gold investors are more active, and BTC/SP500 correlation is weaker.
When there is bearish news for high risk assets, bitcoin fallows nasdaq because those types of investors are more active currently.
When BTC breaks major resistance BTC daytraders are more active than the rest of bitcoin investors (for example DCA investors), and bitcoin kinda does whatever it wants, ignoring the sp500.
When there is nothing going on, btc is stuck in consolidation, and investors are bored, BTC/sp500 correlation might be bigger because there is no other indicator to use to trade
We can go on and elaborate on a few more situations, but I don't think its necessary to get the concept.

All this correlation i was talking about is a short term price action.

[Nrcewker]

I do not want to go into technical terms. Let me explain you very easily mate. Unlike any asset, Bitcoins follow the policy of supply and demand. You should also be aware that, Bitcoins are limited in numbers, that is no more coins can be created or invented. Hence Bitcoins become very much valuable. Now many people try to accumulate Bitcoins, and as Bitcoins are limited in numbers, in order to fulfil the demand, the price also increases. The reverse happens when the demand decreases. This is one of the factors through which the price affects.

[Baofeng]

Hi everyone. Starting from the fact that I am almost totally ignorant of the subject, I wanted to know from some competent person if there are any macroeconomic data that
cause an almost immediate consequence on the price of cryptocurrencies. I also wanted to know if, by the same principle, there are "fundamental" data on individual cryptocurrencies, which publications cause an immediate
variation in the market. What I'm interested in is understanding if there is any correlation, even if minimal, as variation of  0.x %.
Thanks in advance

There is no single measuring stick or data that will tell us where the price is going to go, in every prediction we used tools like RSI, Bollinger Bands or MACD. As far as correlation, again, there were times that Bitcoin market is correlated to stocks or even bonds, but that is not always been the case. But we also have what we call FUD (Fear, Uncertainty and Doubt), so it will be all over in the social media to create panic amongst Bitcoiners and some of them might push the sell button, and so the price is going down hard.

But the very basic is explained by @Nrcewker, the law of supply and demand, so when there is a huge demand, the price goes up as the supply is very limited, specially that next year there will be Bitcoin block halving.

https://decrypt.co/resources/what-is-the-bitcoin-halving

So there is no one size fits all formula for the price, and that's why Bitcoin market is very volatile.