Bitcoin Correlation With US Stock Markets Hits Two-Year High, What Does This Mean For BTC?

Bitcoin’s correlation with Wall Street has been rising over the past few months, and earlier this week it hit a multi-year high.

This comes at an intriguing time, as some of the largest and most prominent US stock indexes hit new all-time highs this week.

BTC-Wall Street correction rises

Last week’s Fed interest rate cut didn’t just positively affect crypto, as Wall Street also headed north. In addition, US macro data on Friday showed that inflation has slowed to 2.2% since August last year. This comes from the Personal Consumption Expenditure Price Index, which some people believe is a more accurate indicator of inflation for individuals.

The Dow Jones Industrial Average immediately reacted with a rise from 41,921 to 42,616 to record a new all-time high. Despite retreating slightly at the end of the trading day, the Dow was still slightly in the green.

The S&P 500 performed similarly, moving from 5,722 to above 5,760 to paint a new ATH of its own before correcting to 5,738 at the closing bell.

The Nasdaq Composite failed to break its July ATH and even ended the day with a minor pullback.

At the same time, BTC price broke above $66,500 on Friday for the first time in two months. According to data from IntoTheBlock, these developments increased the positive correlation between Wall Street and bitcoin, bringing the metric to a two-year high.

$BTCThe correlation with US stocks hit a two-year high this week, a level only surpassed in the second quarter of 2022. pic.twitter.com/in6YRZq2Iw

— IntoTheBlock (@intotheblock) September 27, 2024

When BTC New ATH?

CryptoPotato recently reported that bitcoin’s correlation with gold had also risen to a multi-month high. The price of the yellow metal has also been on a roll in 2024, frequently making new highs. The last was on Thursday at just under $2,690/oz.

As such, the logical question arises: when will BTC break its March all-time high of $73,800? With such a high correlation with assets that have done so over the course of a week, BTC remains more than 10% away from its.

Historically, the fourth quarter has been predominantly positive for the largest cryptocurrency, with an average return of approximately 90% over the past decade. Also, October and November are the two most bullish months for BTC, which together with the data mentioned above could mean that a new all-time high is just around the corner.

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