Bitcoin's Link to U.S. Stocks and Ether Diminishes, Says Analyst
The total cryptocurrency market reaches a new record high of $3.025 trillion while Bitcoin stabilizes around $92,000.
Analyzing the Bitcoin Market's Trends
Bitcoin is regarded as a risk-on asset, largely due to its volatility and perceived connection with U.S. stocks.
In 2024, Bitcoin and the Nasdaq index have moved in sync only 52% of the time on the same trading days.
At present, Bitcoin is trading at around $92,000, marking a significant rise of over 115% year-to-date, and the total cryptocurrency market capitalization has topped $3.025 trillion, a new all-time high as reported on TradingView.
Bitcoin and Nasdaq Movement
Data shows that Bitcoin has seen periods of a strong correlation with the Nasdaq index in previous years. Throughout 2021 and 2022, the two assets moved identically in terms of market fluctuations. However, after achieving an all-time high over $73,000 in March 2024, Bitcoin entered a consolidation phase between $50,000 and $70,000.
Despite Donald Trump's election victory on November 6, Bitcoin continued its upward trajectory, while the Nasdaq has leveled off, leading to a current correlation of merely 0.46, which is among the lowest in five years.
Ether's Connection to Bitcoin Weakens
Similarly, Ether's correlation with Bitcoin has also diminished, with a recent 0.35 correlation recorded over a 30-day period, the second lowest ever noted between the two most significant cryptocurrencies.
This reflects a broader market trend where assets previously thought to be closely related begin to diverge as investors develop a more nuanced understanding of these assets.
Sources: CoinDesk, TradingView
