The correlation between Bitcoin and the S&P 500 reached a 2-year high between the coronavirus crisis

PlanB: $ 7,800 Bitcoin price

The correlation between Bitcoin (BTC) and the S&P 500 is reaching a 2-year high. This is a bearish sign for the cryptocurrency market.

Santiment - a cryptocurrency market research company, recently shown that the recent market downturn has increased the correlation between Bitcoin and traditional financial markets.

According to Santiment, the correlation of Bitcoin with the traditional market cycles from negative to positive. According to the company, the coronavirus pandemic is responsible for the growth of this correlation:

"With this pandemic, it is clear that we are seeing very similar movements when the corona virus causes investors in almost every sector to be equally cautious."

Daily correlation chart between BTC and S&P 500. Source: Twitter / Santiment
Daily correlation chart between BTC and S&P 500. Source: Twitter / Santiment

High correlation is a bearish sign

Santiment explained that Bitcoin's historical data shows that, when its correlation with the S&P 500 soars, it is often accompanied by a major downturn in the cryptocurrency market. The company emphasized:

“Any subsequent recovery over time is often preceded by a decrease in correlation between BTC and S&P. We will see a clear sign of an impending uptrend when this correlation is starting to approach zero (or lower) again. ”

Investor sentiment is positive for Bitcoin

When Bitcoin first saw a decline earlier this month, Bitcoin bull and Galaxy Digital CEO Mike Novogratz said that investors are losing faith in Bitcoin. He explained:

“Bitcoin or cryptocurrency is a game of faith. And when a pandemic broke out, the value of these assets kept evaporating. ”

However, a number of other celebrities in the cryptocurrency market have regained confidence in Bitcoin, following the recent recovery of assets. Raoul Pal, founder and CEO of Global Macro Investor, recently stated that he was quite optimistic about Bitcoin after the asset recovered almost 80% in just a week.

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According to CoinTelegraph
Translated by ToiYeuBitcoin

Nguyen Diep

My name is Nguyen Manh Cuong. I was born in a poor village in Ba Vi district, HA NOI province - windy and sunny land. Currently

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