Cryptocurrencies

Bitcoin Surges to $59,000 but Loses Correlation with Stocks


Bitcoin reached an impressive new all-time high of $73,800 on March 14, but then went into a down period. To top it all off, Bitcoin also lost its correlation with the US stock market. Normally, Bitcoin and the Nasdaq 100 move fairly synchronously, but that has not been the case in recent weeks.

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Bitcoin and the Nasdaq 100

According to Bloomberg Bitcoin’s 90-day correlation with the Nasdaq 100 fell to 0.21 on Tuesday, marking the lowest level for the index since early May and marking a decline of roughly 50% over the past two months.

Market experts attribute this “decoupling” of Bitcoin from the tech exchange to several problems that the digital currency is currently experiencing. Joshua Lim, co-founder of Arbelos Markets, points to the sales of seized Bitcoin by the German government, but also the US government and the Bitcoin from Mt. Gox that will come to the market this month.

All in all, this creates an unusual selling pressure on the Bitcoin price, which the correlation between the Nasdaq and the digital currency is not able to withstand. If you think that Bitcoin has a future and deserves much higher prices, then this could be a good time to buy more.

Not long ago, the Bitcoin price was still at 53,500 dollars and now the digital currency is already at 59,000 dollars. In that respect, we can (very cautiously) hope that the worst is now behind us.

Bitcoin miners capitulating?

To top it all off, the miners are also under pressure due to the falling Bitcoin price. After all, they are 100% dependent on the Bitcoin price and must certainly hope for better times after the halving.

Due to the decline in the Bitcoin price, many miners are forced to sell more BTC than they had anticipated. This also puts downward pressure on the Bitcoin price, which together with the previously mentioned developments causes a fairly negative spiral.

However, there will come a time when the bulls will step in again and we could see that happening at $53,500. Be warned and don’t cheer too soon, because we thought this was also the case around the $56,000 to $58,000 price.

Bitcoin suddenly fell through very quickly. In that respect, the misery may well last longer than anyone expects.

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