{"id":16352,"date":"2022-01-11T13:44:14","date_gmt":"2022-01-11T12:44:14","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=16352"},"modified":"2022-01-11T13:44:23","modified_gmt":"2022-01-11T12:44:23","slug":"heres-why-stocks-might-be-the-reason-behind-crypto-and-bitcoin-drops","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/heres-why-stocks-might-be-the-reason-behind-crypto-and-bitcoin-drops\/","title":{"rendered":"Here’s Why Stocks Might Be the Reason Behind Crypto and Bitcoin Drops"},"content":{"rendered":"\n
The movement of Bitcoin<\/a> and the S&P 500 since January 5 indicates a significant increase in correlation. <\/h5>\n\n\n\n
\"Here's
Here's Why Stocks Might Be the Reason Behind Crypto and Bitcoin Drops<\/figcaption><\/figure>\n\n\n\n

Many observers and professional traders were not surprised by Bitcoin's\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> 17 percent correction that began at the close of last year, but the causes of such a decline were unclear. <\/p>\n\n\n\n

However, according to on TradingView<\/use><\/svg><\/span><\/a> data, we can identify the potential fuel for the present downturn.<\/p>\n\n\n\n

The Relationship between Bitcoin and Stocks<\/h2>\n\n\n\n

While the correlation may not appear obvious at first glance, comparing the movements of Bitcoin<\/use><\/svg><\/span><\/a> and the S&P 500 since Jan. 5 reveals a significant increase in correlation, which is most likely due to the Fed's hints about an interest rate hike in March.<\/p>\n\n\n\n

While an increase in the interest rate is unlikely to have a direct impact on Bitcoin<\/a> or any other cryptocurrency, it is still a powerful risk-off signal that traders are projecting onto their portfolios at the present.<\/p>\n\n\n\n

\"Here's
Here's Why Stocks Might Be the Reason Behind Crypto and Bitcoin Drops. Source:\u00a0<\/em>TradingView<\/use><\/svg><\/span><\/a><\/figcaption><\/figure>\n\n\n\n

Traditional traders have been actively purchasing cryptocurrencies to expand their risk exposure during the strong risk-on phase on the market, thanks to the rise in popularity of Bitcoin and other digital assets as diversification instruments.<\/p>\n\n\n\n

The term “risk-off” appears on the scene<\/h2>\n\n\n\n

As a result of the Fed's statement, traders have opted to sell all risky assets, such as cryptocurrencies and equities, driving their prices down.<\/p>\n\n\n\n

According to correlation indicators, BTC is currently moving with a nearly 60% correlation on indices like the NASDAQ and S&P 500. <\/p>\n\n\n\n

Digital gold, on the other hand, has a negative association with physical gold.<\/p>\n\n\n\n

Following a brief drop to $39,650, BTC has recovered by more than 5%, bringing it back to $41,800. <\/p>\n\n\n\n

The short-term rally is currently looking for fuel, but investors will be disappointed to learn that BTC has had a completely neutral day, with no losses or gains.<\/p>\n","protected":false},"excerpt":{"rendered":"

The movement of Bitcoin and the S&P 500 since January 5 indicates a significant increase in correlation. Many observers and professional traders were not surprised by Bitcoin’s 17 percent correction that began at the close of last year, but the causes of such a decline were unclear. However, according to on TradingView data, we can […]<\/p>\n","protected":false},"author":29,"featured_media":14816,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[5371,5867],"class_list":["post-16352","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitcoin-2","tag-nasdaq-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/12\/Asian-stock-market-sell-off-on-Monday-adds-to-the-volatility-of-Bitcoin-and-cryptocurrency.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/16352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=16352"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/16352\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/14816"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=16352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=16352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=16352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}