{"id":447388,"date":"2020-10-22T13:00:45","date_gmt":"2020-10-22T13:00:45","guid":{"rendered":"https:\/\/wncen.com\/?p=447388"},"modified":"2024-06-11T14:07:26","modified_gmt":"2024-06-11T14:07:26","slug":"bitcoin-deviates-further-away-from-dow-sp-500-as-price-hits-13k","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/bitcoin-deviates-further-away-from-dow-sp-500-as-price-hits-13k\/","title":{"rendered":"Bitcoin Deviates Further Away from Dow, S&P 500 as Price Hits $13K"},"content":{"rendered":"

Bitcoin has wholly sidelined its widely-covered correlation with the US stock market.<\/p>\n

On Thursday, the benchmark cryptocurrency sustained its weekly gains as its price surged by more than 1 percent. The move briefly pushed the price above $13,000 before a modest pullback turned it back below the level. But overall, the bias appeared extremely bullish for Bitcoin.<\/p>\n

\"Bitcoin,<\/a>
Bitcoin retests $13,000-resistance in the latest sign of extended upside momentum. Source: BTCUSD on TradingView.com<\/figcaption><\/figure>\n
Bitcoin retests $13,000-resistance in the latest sign of extended upside momentum. Source: BTCUSD on TradingView.com<\/a><\/pre>\n
That is because the price retested the $13K-level twice in over the previous 24 hours. At the same time, Bitcoin showed extreme resilience against sell-off attempts near $12,550, confirming that bulls want to hold the price floor in anticipation of a medium-term upside run.<\/p>\n
Bitcoin-Stock Correlation<\/h2>\n
Conversely, such a bullish momentum was missing across the US stock market. The last 24 hours witnessed the top Wall Street indices closing a daily session in red, and further hinting bearish continuation ahead of the New York opening bell on Thursday.<\/p>\n
Futures tied to the S&P 500, the Dow Jones, and the Nasdaq Composite fell in the pre-session trading. While the first two were down 0.12- and 0.06-percent, respectively, the third slipped 0.15 percent.<\/p>\n
\"Dow<\/a>
The US Stocks Futures slipped on stimulus worries. Source: TradingView.com<\/figcaption><\/figure>\n
The US Stocks Futures slipped on stimulus worries. Source: TradingView.com<\/a><\/pre>\n
The Wall Street Journal reported<\/a> that investors are waiting for more signals from the US Congress on a long-delayed fiscal stimulus. Despite several rounds of negotiations between the Democrats and the Republicans, the deal remains stuck.<\/p>\n
Earlier, the Federal Reserve Chairman Jerome Powell has warned<\/a> that the delay in passing the stimulus bill would further decelerate the US economy as it attempts to recover from the aftermath of the coronavirus-induced lockdown.<\/p>\n
The US stock market also expects the stimulus as their next catalyst to start a bull run. Even Bitcoin, a non-mainstream financial asset, swelled its market after Congress’s $2 trillion aid in April 2020. That explains the positive correlation<\/a> between the two.<\/p>\n
The Dollar Factor<\/h2>\n
The most common denominator between Bitcoin and the US equities is the US dollar index (DXY)<\/a>. This year, a drop in the greenback helped in driving investors away from cash and cash-based instruments to riskier assets. That benefited Bitcoin and Wall Street \u2013 all at the same time.<\/p>\n
But the last two days were different. The DXY declined on Wednesday but it didn’t translate into a rally in the US stock market. Bitcoin, on the other hand, rose from lower $12Ks to as high as $13,200.<\/p>\n
The situation was similar on Wednesday. The DXY rebounded on stimulus uncertainty. As a result, the S&P 500, the Dow Jones, and the Nasdaq Composite declined. But Bitcoin remained at higher levels, unaffected by the renewed appetite for the dollar.<\/p>\n
\n
Stocks are flat pre market, but Bitcoin doesn't seem to care.<\/p>\n
It does what it wants. <\/p>\n
Correlation can exist for short periods of times, but Bitcoin historically continues to be uncorrelated to the stock market.<\/p>\n
— The Wolf Of All Streets (@scottmelker) October 21, 2020<\/a><\/p><\/blockquote>\n