It has been quite a few days that I found out about this 'hidden' correlation of Bitcoin with Government Bonds (primarily) and Stocks (secondly).
The latter has been well known throughout the community already. BTC investors acknowledge that BTC isn't as detached from Wall Street as the radical crypto minds would like it to be, as in order for the crypto market to flourish, the stock market has to be on an expansion phase, in order to fuel with capital the riskier crypto assets.
But how do Government Bonds, which are a very low risk asset class, relate to Bitcoin? On this study, I have a short-term comparison (on the 4H time-frame) of Bitcoin against the 10 Year U.S. Government Bond on the left side of the chart and on the right Bitcoin against S&P500.
As you see BTC and the US10Y are negatively correlated lately with every large drop on the 10Y resulting into a large rise on BTC. Does that mean that there is an inflow of bond money into BTC lately? Could be, even though it is rare to see capital being moved from such a low risk asset to a high risk asset.
At the same time BTC and S&P500 have their usual positive correlation but lately BTC seems to be less affected by pull-backs on S&P than usual. But every rise on S&P is amplified on BTC.
This could mean that Bitcoin can benefit tremendously in the next few weeks/ months (towards the end of the year) by those two correlations as every rise on S&P should see disproportionately higher gains on S&P, especially if the capital that leaves the bond market is directed to stocks (S&P) or even crypto directly.
Personally I don't want to see this as a paradigm shift (yet), meaning investors moving heavily from traditional low-risk assets to cryptocurrency but these short-term patterns can definitely take Bitcoin to its All Time High (~$20000) by the end of the year! Definitely keep an eye on the Bond Market the next few days/ weeks!
What do you think about that? Can Bitcoin benefit from those correlations? Is this a paradigm shift for you? Feel free to share your work and let me know in the comments section!
Please like, subscribe and share your ideas and charts with the community!
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🎉 👍 Shout-out to TradingShot's 💰 top TradingView Coin donor 💰 this week ==> seba26-77
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The latter has been well known throughout the community already. BTC investors acknowledge that BTC isn't as detached from Wall Street as the radical crypto minds would like it to be, as in order for the crypto market to flourish, the stock market has to be on an expansion phase, in order to fuel with capital the riskier crypto assets.
But how do Government Bonds, which are a very low risk asset class, relate to Bitcoin? On this study, I have a short-term comparison (on the 4H time-frame) of Bitcoin against the 10 Year U.S. Government Bond on the left side of the chart and on the right Bitcoin against S&P500.
As you see BTC and the US10Y are negatively correlated lately with every large drop on the 10Y resulting into a large rise on BTC. Does that mean that there is an inflow of bond money into BTC lately? Could be, even though it is rare to see capital being moved from such a low risk asset to a high risk asset.
At the same time BTC and S&P500 have their usual positive correlation but lately BTC seems to be less affected by pull-backs on S&P than usual. But every rise on S&P is amplified on BTC.
This could mean that Bitcoin can benefit tremendously in the next few weeks/ months (towards the end of the year) by those two correlations as every rise on S&P should see disproportionately higher gains on S&P, especially if the capital that leaves the bond market is directed to stocks (S&P) or even crypto directly.
Personally I don't want to see this as a paradigm shift (yet), meaning investors moving heavily from traditional low-risk assets to cryptocurrency but these short-term patterns can definitely take Bitcoin to its All Time High (~$20000) by the end of the year! Definitely keep an eye on the Bond Market the next few days/ weeks!
What do you think about that? Can Bitcoin benefit from those correlations? Is this a paradigm shift for you? Feel free to share your work and let me know in the comments section!
Please like, subscribe and share your ideas and charts with the community!
--------------------------------------------------------------------------------------------------------
!! Donations via TradingView coins also help me a great deal at posting more free trading content and signals here !!
🎉 👍 Shout-out to TradingShot's 💰 top TradingView Coin donor 💰 this week ==> seba26-77
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