The world’s largest cryptocurrency, Bitcoin has maintained its correlation with other high-risk investments. The huge bull took a spectacular nose dive on May 5th, and Bitcoin (BTC) is still trading downwards at the time of writing.
Over 400 million has been liquidated in 24 hoursÂ
Bitcoin is trading at $36,421, as its 24-hour loss rallies above 8% as at the time of writing. The 7-day continuous drop now stands at 7.85%. Similarly, Ethereum (ETH) has followed Bitcoin’s negative trend and has plummeted from its previous levels. Ether, which was on the verge of breaking $3,000 the day before, is now trading at $2,738 after losing almost 6% in the last 24 hours.
According to data from Coinglass, the market has seen approximately $406 million in liquidations in the last 24 hours. But the stock market appears to be at the root of this downturn, which began with Bitcoin losing 5% on May 5th after nearly reaching $40,000.
Correlation between S& P 500 and Bitcoin
Bitcoin looks to have been stable until the stock market selloff on Thursday. The Nasdaq dropped 5%, and the cryptocurrency market immediately followed suit. Similarly, Bitcoin and other cryptocurrencies soared on Wednesday, recording a bullish increase, but this was not unrelated to the stock market. For the first time in two years, the S&P 500 recorded a notable performance when it surged 3% on that day and the cryptocurrency market benefited from the rise.
Market participants have noticed the cryptocurrency market’s correlation with the stock market in the past. However, the market has seen a significant increase in Bitcoin’s correlation with the stock market this year, notably in the last two months. Bitcoin fell 5% on April 22nd as a result of the same factors.
Before this, Arcane Research data revealed that Bitcoin’s correlation to the S&P 500 had reached the highest level when it hit 0.49, for the first time since October 2020.
