As a seasoned analyst with over two decades of market analysis under my belt, I find myself intrigued by the recent surge in Bitcoin’s correlation with Wall Street. Having navigated through numerous bull and bear markets, I’ve learned to read between the lines and spot trends that might not be immediately apparent.
For the past few months, the link between Bitcoin and the stock market (specifically Wall Street) has been growing stronger, and just this week, it reached a high point over multiple years.
It’s quite interesting that some of the biggest and well-known U.S. stock market indexes reached their highest points ever during the past week.
BTC-Wall Street Correction Rises
Last week’s decrease in the Federal Reserve’s interest rate didn’t only benefit cryptocurrencies; the stock market on Wall Street also saw an upward trend. Furthermore, data from the US released on Friday indicates that inflation has decelerated to 2.2% compared to August of last year, as per the Personal Consumption Expenditures Price Index. Some people consider this index a more reliable indicator of inflation for individuals.
Initially, the Dow Jones Industrial Average spiked upwards, moving from 41,921 to 42,616, setting a fresh record high. However, it dipped slightly by the close of trading, but it remained marginally positive for the day.
The S&P 500 saw comparable growth, rising from approximately 5,722 to more than 5,760, setting a fresh all-time high for itself, and then adjusting to 5,738 at the end of trading hours.
Yesterday, the Nasdaq Composite didn’t manage to surpass its all-time high from July and instead ended the day with a slight dip.
Simultaneously, Bitcoin’s price broke through $66,500 on Friday marking the first time in two months. This event appears to have strengthened the relationship between Wall Street and Bitcoin, as data from IntoTheBlock shows, pushing this correlation metric to its highest point in two years.
This week, the correlation between Bitcoin ($BTC) and U.S. stocks has hit a two-year peak; a level not exceeded since the second quarter of 2022.
— IntoTheBlock (@intotheblock) September 27, 2024
When BTC New ATH?
Recently, CryptoPotato noted that Bitcoin’s relationship with gold has strengthened to a high not seen for several months. Gold, often referred to as the “yellow metal,” has been performing exceptionally well this year, reaching new highs frequently. On Thursday, it almost touched $2,690 per ounce.
Given these circumstances, one might naturally wonder: at what point could Bitcoin surpass its March record high of $73,800? Considering the strong connection it has with assets that have reached this milestone within a week, Bitcoin is currently over 10% below its own record.
Over the last ten years, the largest cryptocurrency has typically seen significant gains during Q4, averaging approximately 90% return. Additionally, October and November are usually the most favorable months for Bitcoin, suggesting that we might be on the verge of a new record high.
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2024-09-28 14:34