Hello!
This morning I saw something interesting that I want to share. @NorthmanTrader posted on Twitter about Bitcoin and the S&P 500 having a 91% correlation. That’s crazy!! After all this time, they still move almost exactly in the same direction every month.
See image here:
So… what does that mean?
It means Bitcoin is not really doing its own thing right now. It’s still tied to the traditional markets. If the S&P goes up, Bitcoin flies higher. If the S&P crashes… well, you already know. Bitcoin crashes harder 😅
For a long time people said Bitcoin is uncorrelated, like digital gold. But lately, it looks more like a tech stock on steroids. Same trade, just with more volatility. That’s why so many traders use it as a risk-on asset. More juice. More pain too.
But for us HODLers… it’s important to understand the game we’re in.
Bitcoin is still young. It’s trying to find its place in the world. Right now it dances with Wall Street, but in the long run, I believe it will break free. Decoupling will happen, and I think it will be very soon.
In the meantime, we need to stay calm. When the market gets nervous, Bitcoin feels it first. When liquidity dries up, Bitcoin gets hit. That’s the reality, the volatility of Bitcoin is crazy.
Still, this is also a big opportunity. As long as people are confused, there is an edge. Because when the true bull run starts, it won’t care about the S&P. It will come fast. And most people won’t be ready.
Alright friends, that’s all for today. Just wanted to share this thought and remind you to keep your eyes open. The patterns are there. We just need to see them.
Have a great weekend! Go touch some grass, hug someone you love, and enjoy life 🌞
See you all soon!