Тhe correlation of Bitcoin with the S&P 500 index declined

by in Cryptocurrency News

Bitcoin S&P 500 correlation

A recent report by Arcane Research said that the correlation rate of Bitcoin with the stock market markedly fell.

Related: Arcane Research: cryptocurrency “fear and greed index” rose

Experts note that the panic due to the spread of coronavirus and a sudden supply shock led to uncertainty in the financial markets.

Because of this, world indices plummeted. Bitcoin, which is still perceived by most as a risky asset, was no exception. As a result, the correlation of “digital gold” with the S&P 500 index reached the highest rate in history - 0.584.

Experts of the Norwegian company say that however, the price dynamics of recent days may indicate a reversal of this trend.

According to the latest company data, the correlation coefficient of BTC with the “barometer of the American economy” is now at around 0.48. The chart below shows how Bitcoin is recovering much more confidently than the S&P 500, EURONEXT, FTSE and MOEX indices.

Arcane Research: Bitcoin

By the way, in relation to the peak marks, the S&P 500 has already fallen by 32%. The collapse of the shares of American companies is much faster than during the last world economic crisis in 2007-2008 or against the backdrop of the collapse of the “dotcom bubble”.

Nevertheless, the cryptocurrency “fear index” is still at extremely low levels, which indicates a low degree of investor confidence:

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Arcane Research: Bitcoin

Against the backdrop of general turbulence, trading volumes on crypto exchanges rose to the levels of July 2019, and the volatility indicator almost reached 9%. According to analysts, this is a lot even for Bitcoin.