Bitcoin Rising Correlation With Traditional Market Undermines ‘Non-Related Asset’ Narrative

Commenting on the latest price movement, popular Podcaster, Lark Davis tweeted,

“Historically the S&P 500 has done poorly in September, and quite badly in October of election years. Bitcoin’s high correlation to the equity markets could mean that we are in for some big bumps over the next 6 weeks. GOOD NEWS is that November is usually a strong month.”

Besides, the one-year realized correlation between Bitcoin and Gold was also hovering a little below its ATH. Notably, prior to 2018, the Bitcoin-Gold correlation was negative and hence the narrative was mostly dismissed. Similar was the case with other tech stocks or stock indices such as VIX. The recent trend could also potentially signal to the point Bitcoin has slowly evolved into a mainstream asset over the last two years and hence its correlations with non-crypto assets are important to gauge its price movement in the coming days.

The coronavirus crisis has impacted every industry, from tourism to real estate, health care to manufacturing and the cryptocurrency industry is not exempt. While Bitcoin did start with an impressive streak in the first quarter of 2020, it hit a snag as the pandemic’s economic blow quickly affected all markets. Similar to the traditional market, the collective crypto market crashed by more than 50% from its February high.