Bitcoin Up, Stocks Down as BTC Correlation to Nasdaq Weakens

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While the crypto and stock markets both remain bearish, Bitcoin’s correlation to stocks is close to its lowest point this year. The 40-day correlation between the largest cryptocurrency and the Nasdaq 100 index is now below 0.50, according to until Bloomberg data.
Bitcoin is trading at $20,712 at the time of writing, up 2.5% in the past 24 hours according to CoinMarketCap. By contrast, US equities were hit hard on Thursday as investors worried about the continuation of the Federal Reserve’s rate hike. And it’s not just the tech-heavy Nasdaq: Global stock markets also took a beating on Thursday — along with oil — as more investors hold onto their dollars.

Correlation with the Nasdaq is measured on a scale of -1 to 1: -1 means prices always move in opposite directions; 1 means they move together. Today, Bitcoin has the lowest correlation with the Nasdaq since early January.
This is a very different story from April, when the 30-day correlation with the Nasdaq was at its highest level in more than a year.
The correlation is still positive, meaning Bitcoin and technology stocks are still moving in the same direction. But if the correlation continues to weaken, it could be taken as a sign that crypto has seen bottom and is poised to recover.

For most of the pandemic, Bitcoin has moved in the same direction as stocks. Right now, it is down nearly 70% from its all-time high in November, near $69,000. This is largely because crypto is seen as a risky asset by many major investors and we are in a risky environment as skyrocketing inflation affects virtually every country in the world. Political uncertainty with the Russian war in Ukraine and chaos in the supply chain from China make a recession seem imminent.

Since 2020, Bitcoin has been more mainstream than ever as major companies like MicroStrategy and Tesla added it to their balance sheets and even previous Wall Street skeptics changed their tone, leading Bitcoin to perform as a technology stock. Until it crashed in May.
Could the crypto rebound be in full swing?

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Jones is an all-round geek who loves to learn new things every day. With a background in computer science and a passion for web-based technologies and gadgets and focus on writing about web trends, smartphones and tablets.

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