Bitcoin’s Declining Correlation to US Stocks Could Signal the End of BTC Bear Market


Bitcoin. Source: Adobe

The There is a positive correlation between the Bitcoin The record-breaking 2022 high of the US stock market and price is now fading. The Bitcoin This decoupling may be a sign of good news for bulls, as it could mean that the US stock market’s ongoing struggles are becoming less of a headwind for the world’s largest cryptocurrency.

According The 60-day period is shown in a chart by CoinMetrics. Pearson correlation between the BTC price and the closing price of the S&P 500, the most widely followed US equity market benchmark, fell to its lowest level since April 2022 at 0.30 this week

The In 2016, correlation reached an all-time high at 0.667. September 2022, After rising sharply earlier in the year as crypto and equity prices crashed in unison amid worries about a stronger-than-expected pick up in US inflationary pressures and The resultant tightening response from the US Federal Reserve.

Bitcoin and the S&P 500 got smoked in unIt ison in 2022. Source: Trading View

The fall in the correlation between the two asset classes comes in the wake of crypto’s impressive rally since the start of the year. Bitcoin was last up around 35% on the year, while the S&P 500 is up a far more modest 4.0%.

Could a Lower Correlation to Stocks Indicate the End of Bear Market?

Bitcoin’s elevated correlation to US equity markets in the latter half of 2022 was a clear feature of the ongoing bear market that, by the lows in NovemberBTC pulled as low as 77% from its 2021 record highs, $69,000.

Prior The 60-day grace period will then apply. Pearson Correlation between Bitcoin and the S&P 500 had only ever been as high as 0.3 on a few occasions, and would frequently fall below zero. The Few years until 2022 Bitcoin’s correlation to US stocks was much weaker were characterized by significant price gains.

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