Although the correlation between Bitcoin and U.S. stocks has declined in recent weeks, the probability that the rising risk-on market sentiment could buoy BTC remains high.
If Bitcoin begins to show some correlation with the S&P 500 again, then the positive earnings season met with a strong performance by Big Tech could further fuel Bitcoin's momentum.
Vinokourov also emphasized that Bitcoin could pull back in the near term, noting that if Bitcoin rose in October due to the uncertainty around the election, then the post-election cycle could cause BTC to unwind.
Another metric that points toward a declining correlation between Bitcoin and U.S. stocks is the Bitcoin network-value-to-transactions, or NVT, price ratio.
The NVT price calculates the value of Bitcoin based on its market price and the amount of BTC transferred on the blockchain on a daily basis.
The NVT price of Bitcoin has also seen a drop in correlation with the S&P 500, as on-chain analyst Willy Woo reported.
Since achieving a peak of $13,859, the price of Bitcoin has fallen by around 4% in the past three days.
Bitcoin has seen unexpected price swings in the past, especially during bull markets.
"Should COVID continue to surge and stimulus falter in the wake of a contested US election, it would make sense for Bitcoin adoption to continue increasing versus BTC being sold off."
As long as the price of Bitcoin remains stable above key support levels of $12,700 and $13,000, the overall technical uptrend of BTC remains intact.
Back on track: US macro events unlikely to fully derail Bitcoin price gains
Published on Oct 30, 2020
by Cointele | Published on Coinage
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