Hopefully the featured chart says it all. Oil hit a 21-YEAR LOW and, of course, bounced, leading the SPX to bounce, leading Bitcoin to bounce. Simple as that. This is just a natural reaction rally and really illustrates just how strongly Bitcoin is correlated to the traditional stock market right now. Already on the SPX chart it appears we are simply headed back down to where we started yesterday's green candle, which will take Bitcoin down with it. Honestly -- I'm a tad miffed at how crypto YouTubers with millions of followers can actually record a video talking excitedly about Bitcoin's pump today and NOT mention the correlation with traditional stocks (???). It's just... never mind...
Now - this is not to say that Bitcoin still can't turn it around from this point. But for that to happen I would need to see one of two things:
1. The outlook change drastically for traditional stocks, which is incredibly bad given the COVID-19 situation, jobless claims, and very probable incoming economic downturn.
2. Bitcoin de-correlating with the S&P 500. Correlations do come and go and fade in/fade out to varying degrees, so this is not out of the question. For me to be convinced, though, I'd need to see the S&P do a couple of red days while Bitcoin either stays flat or goes up.
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Cheers and happy trading and stay safe!
Now - this is not to say that Bitcoin still can't turn it around from this point. But for that to happen I would need to see one of two things:
1. The outlook change drastically for traditional stocks, which is incredibly bad given the COVID-19 situation, jobless claims, and very probable incoming economic downturn.
2. Bitcoin de-correlating with the S&P 500. Correlations do come and go and fade in/fade out to varying degrees, so this is not out of the question. For me to be convinced, though, I'd need to see the S&P do a couple of red days while Bitcoin either stays flat or goes up.
Please like and comment.
Cheers and happy trading and stay safe!
