Is BTC and the S&P 500 in Sync?
When it comes to trending topics and those discussions hotly debated over, Bitcoin and the BTC price never seems to be out of it in these past couple of months. This is to be expected seeing the rollercoaster of a ride the price has taken. From going below the $9,000 mark to rising close to toppling the $9,500 resistance a week back and hitting a monthly high of $9,480, to only come back down to sit in the $9,100 range within the span of a few weeks has left the experts and analysts at a loss for the most part. While theories and reasons are many, there is not much common ground between those claims and what is happening in reality. Truth be told, there is no one who can accurately predict the movement cryptocurrency prices will take but there are clear indicators which help out a lot. One of these indicators that might be able to give us something concrete in terms of BTC price prediction is its link with the S&P 500.
As mentioned above, there has been a lot of resemblance between the performance of the S&P 500 and Bitcoin value over the last couple of months and the fluctuation is seen on both sides. This theory was giving a boost when yesterday, BTC slid down hard into the $9,000 range which coincidentally matched the equities market performance. Whereas this is not the first time that Bitcoin has been linked directly with something else, it might be the first-time experts are given a way to guess BTC’s mid-term outlook. This might not be such a good thing for Bitcoin as investors are now being vary of going into the stock market. People are expecting Bitcoin’s next bull run and uptrend to come soon but if this new found relationship is to be believed, then it might not be coming until late 2020. Ever since the infamous month of march appeared bringing with it the losses in both Bitcoin and traditional markets due to the Covid-19 pandemic break, BTC has been closely following the line of the S&P Markets. We can chalk this revelation down to the effect of corona virus and the economic impacts of lockdown but there is still uncertainty on this topic due to limited data.
At the time of writing, BTC has recovered slightly from yesterday and is trading just over $9,100 but trading has been down 1% from previous records. This is even after Bitcoin Bulls are trying to get it over the $9,200 range again. If this link with the S&P 500 is to be believed, then BTC has a very hard time moving forward for now. Just last month, the correlation between the two reached a yearly all time high of 56.9% according to skew. While there is definite uncertainty in the stock markets right now and many are rethinking their options, this would also mean that Bitcoin will face the same level of growth if the correlation continues. In any case, it is still too early to call in on this and we must wait for further data to actually move forward. As for prediction of the BTC price, I believe that while this link will help, it is not absolute. What do you think about this topic? Are the S&P 500 and Bitcoin corelated? Is this the best way to predict its price? Is there a bigger indicator for BTC or any Altcoin out there? Share your opinions with us in the comments below or send us your thoughts on our socials and we will definitely feature you on our platform!