Bitcoin’s (BTC) correlation with the S&P 500 turns negative for the first time in 2021
Bitcoin (BTC) continues to show volatility while trading in a closed range between $ 30,000 and $ 35,000. At the time of going to press, Bitcoin is down 3.88% and trading at $ 33,142 with a market cap of $ 620 billion.
As BTC continues to trade under pressure, it has now entered a negative correlation with the S&P 500 Index (INDEXSP: .INX). As a result, there is a strong divergence between the world’s largest cryptocurrency and the largest stock index.
It was for the first time in 2021 that BTC’s correlation turned negative. For the first six months of 2021, Bitcoin and the S&P 500 were weakly correlated as the two continued their northward journey, hitting new all-time highs for a few weeks, reports Kaiko.
However, BTC has corrected over 45% in the past two months as the S&P 500 continues to climb. On Monday, the S&P 500 surged again, closing a record high at 4,384 levels. So far this year, the S&P 500 has given a strong return of 18.48%.
Bitcoin’s correlation with gold also remains negative, however, it has jumped 20% over the past month.
Bitcoin’s 6-month average return turns negative
According to on-chain data provider Santiment, the 6-month average Bitcoin trading returns have turned negative. With BTC repeatedly moving to lower lows, investor confidence is low and FUD is higher.
Santiment notes that based on historical trends, now is the right time to take the step for long-term investors by keeping their negative bias aside. According to the on-chain data provider, Bitcoin looks like undervalued at this price point.
On the other hand, Bitcoin’s mining hash rate showed a strong rebound, dropping back above 100 exahashs / second. It’s a healthy sign and suggests the miners are getting back on track after a major crackdown by China last month.
Bitcoin (BTC) must convincingly break through and hold on to the $ 35,000 resistance if it is to start the next stage of the bull run.
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