Short Answer:
- For significant SPX drops: BTC will likely follow
- For smaller SPX corrections: BTC might not
Long Answer:
There are currently two types of BTC holders – the believers and the speculators:
- Believers (50%+ of market*): believe in BTC’s long-term potentials and most are not affected by market actions.
- Speculators (50%- of market*): Affected by market actions, and drive price actions
* more than 50% of the BTCs haven’t been moved for more than 1 year; more than 30% of BTCs haven’t been moved for more than 2 years.
SPX drops significantly -> Generate fear in market -> Speculators doubt BTC will go to 0 -> panic selling -> BTC drops significantly
However, for SPX corrections, most are not significant enough to incur fear in the market. And the impact likely wouldn’t flow to BTC speculators.
Should one watch SPX closely to make BTC directional judgements?
Our answer is no, because we don’t think BTC price actions would be highly correlated with small SPX corrections. We could still see a repeat of May 2019, when the SPX correction led to a large group of BTC shorts, who eventually got squeezed, ending in an 80%+ increase in BTC price.
The question now:
Will there be a COVID19 2nd wave SIGNIFICANT ENOUGH for SPX to drop 15%+?
Do you think BTC is correlated with SPX movements? Are you bullish or bearish? All thoughts and critics are welcomed!
- For significant SPX drops: BTC will likely follow
- For smaller SPX corrections: BTC might not
Long Answer:
There are currently two types of BTC holders – the believers and the speculators:
- Believers (50%+ of market*): believe in BTC’s long-term potentials and most are not affected by market actions.
- Speculators (50%- of market*): Affected by market actions, and drive price actions
* more than 50% of the BTCs haven’t been moved for more than 1 year; more than 30% of BTCs haven’t been moved for more than 2 years.
SPX drops significantly -> Generate fear in market -> Speculators doubt BTC will go to 0 -> panic selling -> BTC drops significantly
However, for SPX corrections, most are not significant enough to incur fear in the market. And the impact likely wouldn’t flow to BTC speculators.
Should one watch SPX closely to make BTC directional judgements?
Our answer is no, because we don’t think BTC price actions would be highly correlated with small SPX corrections. We could still see a repeat of May 2019, when the SPX correction led to a large group of BTC shorts, who eventually got squeezed, ending in an 80%+ increase in BTC price.
The question now:
Will there be a COVID19 2nd wave SIGNIFICANT ENOUGH for SPX to drop 15%+?
Do you think BTC is correlated with SPX movements? Are you bullish or bearish? All thoughts and critics are welcomed!
Comment:
Can't believe I'm saying this, but yes, we are bullish for the short-term even if COVID19 2nd wave hits.
Comment:
This is how we tie TA and FA together!
Comment:
There are two group of people in the crypto space: long-term investors and short-term speculators. One often overlooked fact is while short-term speculators dominate the actively daily traded BTC, long-term investors actually dominate the entire BTC holding. Understanding how these two groups contribute to BTC value and price separately is crucial in profiting in the long run.
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