The correlation between Bitcoin and the NASDAQ Composite and S&P 500 has fallen to its lowest level in around two years, according to data from crypto analysis firm Block Scholes.
• Bitcoin, NASDAQ Composite and S&P 500 correlation at lowest level since July 2021
• Crypto traders should stop focusing solely on US market sentiment
• Rising optimism in the crypto market
Bitcoin is declining in correlation with traditional risk assets. This is according to data from crypto derivatives analysis firm Block Scholes. The 90-day moving correlation between changes in the price of bitcoin and the tech-heavy Wall Street stock index NASDAQ Composite and the broader S&P 500 index has fallen to near zero, Block Scholes recently explained. This connection has thus reached its lowest level in about two years.
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Lowest level since July 2021
“She [die Korrelation] is now at its lowest level since July 2021, when BTC was between its two highs in April and November,” CoinDesk quoted a mail from Andrew Melville, research analyst at Block Scholes, as saying The correlation has occurred as both assets recouped the losses they suffered during last year’s tightening cycle.”
Crypto traders who have focused exclusively on traditional market sentiment and macroeconomic developments may therefore now be disappointed, the expert warns, as the fate of Bitcoin is no longer tied to sentiment in US stock markets for the time being.
Increasing optimism in the crypto market
After more and more companies, including BlackRock, Fidelity, Wisdom Tree, Van Eck and Invesco, registered Bitcoin ETFs, optimism on the crypto market increased again. The increased interest in exchange-traded products brought more positive sentiment to the crypto industry. “Global BTC ETPs saw inflows of 13,822 BTC in June, with inflows starting following BlackRock’s announcement on June 15,” noted Vetle Lunde, senior research analyst at K33, according to CoinDesk in a note to clients. “Inflows were strong across all jurisdictions, with Canadian and European spot ETPs, as well as US futures ETFs all seeing solid inflows,” the analyst continued.
Now it remains exciting to see how long the optimism on the crypto market will last.
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