Cryptocurrency Market Awaits Catalyst as Correlation with Traditional Markets Weakens
According to reports, Bernstein analysts said that the correlation between cryptocurrency and US stock market and macro events was weakening, and the cryptocur…
According to reports, Bernstein analysts said that the correlation between cryptocurrency and US stock market and macro events was weakening, and the cryptocurrency market seemed to be between long and short, waiting for “any further catalyst”. The sensitivity of the encryption market to the traditional market is no longer the same as in the past. The correlation between Bitcoin and stocks has declined steadily throughout the year. The correlation between Bitcoin and the Nasdaq Composite Index has dropped from 0.94 in early February to 0.58 now.
Viewpoint: The correlation between cryptocurrency and US stock market and macro events is weakening
Interpretation of the news:
Bernstein analysts have recently reported that the correlation between the cryptocurrency market and the traditional US stock market and macro events may be weakening. It appears that the cryptocurrency market is currently in a state of limbo, waiting for a “further catalyst” to push it in either direction.
Traditionally, the sensitivity of the cryptocurrency market towards the traditional market has been strong. However, the correlation between Bitcoin and stocks has been steadily declining throughout the year. The correlation between Bitcoin and the Nasdaq Composite Index has dropped from a high of 0.94 in February to 0.58 in the present day. This suggests that the cryptocurrency market may not necessarily react to the same macro events as the traditional market.
Although it is difficult to predict what will be the catalyst that will move the market, the weakening correlation implies that the cryptocurrency market is no longer exclusively dependent on the trajectory of the traditional market. This may mean that a catalyst could emerge from within the cryptocurrency market itself.
It is also important to note that cryptocurrencies, particularly Bitcoin, have been experiencing a series of highs and lows, with some investors feeling that the market has reached its peak. This may partially account for the current status of the cryptocurrency market, which seems to be in a state of stagnancy.
Another potential explanation for the market’s current status may be that cryptocurrency is still in the very early stages of development, and that it may take time before it fully integrates into the traditional market. This integration may require governments to take a closer look at regulating the market, which in turn could bring more stability and possibly more investment to the market.
In conclusion, the correlation between the cryptocurrency market and traditional markets is slowly weakening, and the cryptocurrency market appears to be waiting on a catalyst to move it in a definitive direction. While the market remains in a state of limbo, it may gradually detach from the traditional market and become self-sufficient over time.
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