US Stocks Drop Out, Bitcoin (BTC) Holds Up – The Beginning Of A Revival?

Les actions américaines dévissent, le Bitcoin (BTC) résiste – Le début de la décorrélation ?

Yesterday, the US equity markets had a red day, as cryptocurrency prices are showing some signs of life this week. Is this the start of the stock-crypto de-correlation? We take stock.

US stocks were uniformly in the red yesterday

In the same day yesterday, US stocks rose by $860 billion, resulting in falls. So Amazon (AMZN) lost -4.75%, Alphabet (GOOG) fell by -3.74% and Apple (AAPL) by -3.70%:

The markets responded to Jerome Powell’s announcement. The Chairman of the Federal Reserve announced yesterday that the Central Bank raised its rates to the highest level in fifteen years. He also plans to continue raising themfear of reviving retreat.

With a direct effect on the stock markets. At the end of yesterday, the Dow Jones posted -1.55% and the NASDAQ fell -3.39%. But Captain Powell remained firm: for him, the US economy is not yet in recession.

“[Une récession] a broad decline across multiple industries sustained for more than two or three months. It doesn’t matter what is happening now.»

Analysis of course debatable, but which shows that the diet is in dire straitsgiven the macroeconomic situation that has only appeased.

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Cryptocurrency (finally) uncorrelated?

If the FED Chairman pulled out the oars, and if the equity markets reacted particularly negatively, this is not the case for cryptocurrencies. This week, the price of Bitcoin (BTC) seems to be decided. to sustainably cross the psychological threshold of 20,000 dollars. What can be seen in the beginning of the decoration?

Bitcoin NASDAQ S&P 500 Comparison

Bitcoin (BTC) price vs. S&P 500 and NASDAQ

Looking at the correlation between BTC and Ether (ETH) with specific stocks, we see that the ratio has gone down, strongly for some. As a reminder, a ratio equal to 1 indicates a perfect correlation. Conversely, a negative ratio indicates isolation:

Cryptocurrency equity correlation

Why is this possible correlation so widely noticed? Because it is of the value proposition carried by cryptocurrencies. That is, offering assets that are not linked to traditional markets. In fact, historically it was more complicated than that. In recent years in particular, Bitcoin and stocks have tended to move in tandem, with cryptocurrencies falling when equity markets fall.

👉 Learn more about the history of the creation of Bitcoin (BTC)

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Cryptocurrency no longer moving in tandem with stocks?

But that would change, according to some analysts. Yesterday’s diving tends to confirm this, as well as some cultural changes in the ecosystem. In any case, this is what analyst Simon Peters suggested to our colleagues from The Motley Fool:

The proportion of wealth held in coins transferred in the last three months now at a historic low. […] Wealth held in coins that haven’t moved in more than three months is now higher.»

The “HOLD” seems to be in the lead then. The reason for that is that Bitcoin “purged” holders who were inclined to sell dropped. Except for minors, investors are generally not interested in selling at this price level. This means they are holding onto their BTC even as equity markets may be declining.

Will we then see the arrival of cryptocurrencies as a store of value against falling stocks? It is still far from confirmed, but the events of this week show that the story is possible.

👉 Also read – NASDAQ is about to launch a cryptocurrency management fund

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Source: IntoTheBlock, TradingView, BTC/USDT

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