It's no surprise that BTC trails SPX performance. If the SPX takes a beating, BTC takes a beating. There has been a historical correlation between the two for some time now. That begs the question: are we ever going to see a divergence between BTC and SPX, and if so, why would it happen?
Taking a look at my chart, I performed a regression analysis on BTC prices from late 2017. Current regression analysis shows a current trend price of 9111, with SD of +1 and -1 encapsulating most historical price movements. At current, BTC is well below the 9111 trend price. The reason is as stated above - it is treated as an asset correlated with S&P prices. Running a regression on BTC prices against the SPX gives me an r value of .43, which indicates a fairly strong correlation. This means most BTC retail investors do not view BTC as a hedge against the market, but rather as a further indicator of the market; they view BTC prices as relative to the strength of the equities market. This view couldn't be further from the truth - BTC should gain value if every other market declines since it's meant to represent a free-standing 'currency.'
With that in mind, for those who think that the equities markets have yet to bottom-out, BTC also has yet to bottom-out. I do not believe that equities will remain at current valuations. Prices will continue their descent, and as retail investors cash out of equities, they will cash out of BTC, presenting BTC traders with a prime opportunity of entry. I believe it'll go as low as 4800 before it begins trending back up 9000 and beyond.
To further evidence the weakness in the current bull trend, I've shown the RSI and DMI as well as 30 vs 13 MDA. RSI is hovering around centre while ADX in DMI shows weak momentum. BTC investors are clueless about the strength of the current market. If the market was strong, they'd have no problem keeping their position. If the market is weak, they want to believe it's strong so they end up unsure - clueless. SPX is set for another price crash, and so is BTC. I'd market a good BTC entry point at 5000.
Taking a look at my chart, I performed a regression analysis on BTC prices from late 2017. Current regression analysis shows a current trend price of 9111, with SD of +1 and -1 encapsulating most historical price movements. At current, BTC is well below the 9111 trend price. The reason is as stated above - it is treated as an asset correlated with S&P prices. Running a regression on BTC prices against the SPX gives me an r value of .43, which indicates a fairly strong correlation. This means most BTC retail investors do not view BTC as a hedge against the market, but rather as a further indicator of the market; they view BTC prices as relative to the strength of the equities market. This view couldn't be further from the truth - BTC should gain value if every other market declines since it's meant to represent a free-standing 'currency.'
With that in mind, for those who think that the equities markets have yet to bottom-out, BTC also has yet to bottom-out. I do not believe that equities will remain at current valuations. Prices will continue their descent, and as retail investors cash out of equities, they will cash out of BTC, presenting BTC traders with a prime opportunity of entry. I believe it'll go as low as 4800 before it begins trending back up 9000 and beyond.
To further evidence the weakness in the current bull trend, I've shown the RSI and DMI as well as 30 vs 13 MDA. RSI is hovering around centre while ADX in DMI shows weak momentum. BTC investors are clueless about the strength of the current market. If the market was strong, they'd have no problem keeping their position. If the market is weak, they want to believe it's strong so they end up unsure - clueless. SPX is set for another price crash, and so is BTC. I'd market a good BTC entry point at 5000.