Recent data reveals a remarkable shift in the relationship between Bitcoin and US stocks. Previously, these assets showed a positive correlation, impacting Bitcoin and the broader crypto market. However, according to market intelligence platform IntoTheBlock, the correlation between Bitcoin and the Nasdaq 100 and S&P 500 has now turned negative. This negative correlation indicates that the prices of Bitcoin and these stocks are moving in opposite directions.
In the current landscape, Bitcoin has been on a downward trend while the Nasdaq 100 and S&P 500 have been experiencing significant rallies. Data from IntoTheBlock shows that the Nasdaq 100 and S&P 500 have seen gains of over 7% and 4%, respectively, in the last month, while Bitcoin has declined by over 15%. This disconnect is further exacerbated by the selling pressure that Bitcoin is facing, as noted by the German government, putting a cap on Bitcoin’s potential upside.
The selling pressure on Bitcoin has been a contributing factor to its detachment from US stocks. Initially, Bitcoin showed a positive correlation with the Nasdaq 100 and S&P 500, but this correlation started to decline as Bitcoin miners began selling off a significant portion of their holdings. Reports indicate that over 30,000 BTC were sold by miners in June, further adding to the downward pressure on Bitcoin’s price.
External factors, such as the actions of the German government, have also played a role in shaping Bitcoin’s current trajectory. The German government’s decision to offload bitcoins seized from Movie2k further intensified selling pressure on Bitcoin. This relentless selling spree has continued into the present month, contributing to Bitcoin’s disconnect from US stocks.
The upcoming release of the US Consumer Price Index (CPI) inflation data on July 11 will be a crucial test for both Bitcoin and US stocks. Positive inflation data is expected to bring about a rebound in Bitcoin’s price, particularly as it strives to regain the $60,000 support level. This development could have a bullish impact on Bitcoin and the wider crypto market in the short term.
The evolving dynamics between Bitcoin and US stocks reflect a significant shift in the market landscape. As Bitcoin navigates through selling pressure and external influences, its correlation with traditional assets undergoes a transformative phase. The upcoming inflation data release will serve as a litmus test for the resilience of Bitcoin and its potential for recovery in the near term.