Over the past few days, Bitcoin has been on an impressively bullish trajectory, reaching the $25,000 mark. While prices cannot sustain above that level, it is still a positive development for early 2023.
Bitcoin’s relationship shifts to Chinese stocks as correlation with S&P 500 disappears @azcoinnews https://t.co/rmmFpBecGc
— Kyptos (@azcoinnews) February 23, 2023
More interesting, however, is the relationship between the stock market and the cryptocurrency market. In 2022, the stock market is going up, the crypto market is going up with it, and it has been for a long time.
But things are different now, and the two markets appear to be finally decoupling. Looking at the chart of Bitcoin and the S&P 500, Bitcoin is rising while the S&P 500 is moving in the opposite direction. This can confirm that the two markets have indeed diverged.
according to data Recently, according to CryptoQuant, Bitcoin began to show a negative correlation with the S&P 500, a significant shift from the positive correlations shown in the past. This is an important development for investors looking to diversify their portfolios by investing in various asset classes. While a negative correlation means that Bitcoin and the S&P 500 move in opposite directions, it also suggests that Bitcoin can be a potential hedge against stock market volatility.
Source: CryptoQuant
Interestingly, the last time a negative correlation between Bitcoin and the S&P 500 was observed was during the FTX crash in November, when Bitcoin fell. This time, however, the negative correlation appears to be sloping upwards. The fact that Bitcoin is down while the S&P 500 is up slightly suggests that investors are looking to hedge their exposure to the stock market by investing in Bitcoin.
Bitcoin Turns to Chinese Stock Index Correlation
As mentioned above, this marks the beginning of Bitcoin as a hedging tool. But now its relationship has shifted to that of the Chinese stock index.
#bitcoinThe correlation with Chinese stocks is getting stronger 👀.will #China lead #market Rebound this year? pic.twitter.com/9D1jzSiR3K
— John Wood (@JohnwoodHBI) February 23, 2023
“Bitcoin is increasingly correlated with Chinese stocks. Will China lead this year’s bull market?”
Sources say Chinese stocks have continued to rise and may continue to do so this year. This is because the Chinese economy is improving due to factors such as policy easing in the wake of the Covid-19 pandemic. However, many analysts expect Chinese stocks to continue to strengthen as the yuan appreciates against the dollar.
While it remains to be seen how Bitcoin’s relationship with China’s stock market will play out in the long run, it is clear that the cryptocurrency market is starting to operate independently of the stock market. . It also means that Bitcoin’s status as an inflation hedge is becoming clearer to investors.
As the correlation between Bitcoin and the S&P 500 continues to grow, it will be interesting to see if there is a negative correlation and if it is primarily bullish. This is especially important as it can influence investors’ decisions to allocate more funds to Bitcoin or reduce their exposure to cryptocurrencies.
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Ming Ying
according to Kyptos
