Bitcoin [BTC] at Highest Correlation with Stock Markets – Is a Bounce Near?

Bitcoin [BTC] price seems to be holding on to it’s support levels, showing signs of bulls. While the drop due to coronavirus panic has spread across all investment assets, Bitcoin investors seems to be showing resistance to the sell-off pressure.

This is a novel territory for Bitcoin, many countries are under a complete lock-down, and the economic systems of the world at the placed at the brink of a collapse.

Josh Rager, a derviatives trader and crypto analyst tweeted,

Bitcoin has never known a recession or black swan event and currently is at it’s highest correlation 0.6 with the S&P 500

The S&P 500 index plunged 32.7% from highs near $3400 on 19th February. In less than a month, the bullish view as completely changed and it pointing towards a collapse.

BTC and S&P 500 Index Correlation (Source: Tweet)

On the worst day, Bitcoin plunged about 57% touching lows at $3,800. Given the volatility and history of Bitcoin it certainly has more room below, however, it has held support since then. Moreover, if the situation continues to worsen, the short-term view remains bearish. He added,

I don’t believe Bitcoin pumps yet, if stocks continue to dump

The Price Action in the last two days have been hopeful in terms of breaking correlation with the plunging stock markets. Prominent crypto derivatives trader, TheBoot (alias) tweeted,