Bitcoin and Nasdaq: The latest trend in market correlation
- Bitcoin and Nasdaq decoupling halted as BTC rose in value.
- BTC’s funding rate remained positive as the transaction price hovered around $30,700.
Interesting data from Ecoinmetrics showed an emerging correlation between Bitcoin [BTC] and Nasdaq. This new pattern intrigued observers and shed light on the general direction of BTC and sentiment among traders.
Read Bitcoins [BTC] Price prediction 2023-24
Correlation between Bitcoin and Nasdaq
Bitcoin’s price correlation with traditional stocks has served as a valuable tool for investors in constructing their investment portfolios. Additionally, BTC has become the benchmark by which traditional stocks are measured.
A recent analysis by Ecoinmetrics has highlighted a notable phenomenon: BTC and Nasdaq price trends have become intertwined as of late.
Source: Econometrics
The chart showed a period of decoupling between BTC and Nasdaq from around April to June. Prior to this period, BTC and traditional stock prices showed a similar trend.
However, the current surge in BTC price, fueled by recent developments coupled with bearish sentiment in stock markets, has allowed BTC to close the gap and catch up with the Nasdaq.
waves and feelings
The recent surge in applications for a Bitcoin ETF from various financial institutions has led to a significant surge in social buzz surrounding the king coin over the past few days.
Analyzing the daily price action, it became clear that BTC had experienced a significant increase in value since the news broke.
Source: TradingView
At the time of this writing, BTC was trading at around $30,700, albeit with a slight drop in value. However, it ended the previous trading session up 3%.
The uptrend has been unmistakably the dominant one, as shown by the Relative Strength Index (RSI) line, which is in the overbought territory. In addition, the uptrend led to more positive sentiment among traders.
According to the funding rate table provided by CoinGlass, BTC has seen an increase in positive funding rates across most exchanges. At the time of this writing, the funding rate remained positive, suggesting a common bet on further price increases above the current range.
With the entry of various traditional financial institutions competing for BTC ETF licenses, the price of BTC is expected to continue rising until a corrective phase occurs.
BTC 30-day MVRV
BTC’s ongoing price trend offered a favorable outlook for short-term holders who entered the market before this trend began. According to Santiment’s 30-day Market Value to Realized Value (MVRV) metric, BTC had crossed the zero mark.
How much are 1.10.100 BTCs worth today?
This indicated a notable shift towards profitability. At the time of this writing, the MVRV was over 12%, which meant significant gains for those who held positions during this period.
Source: Santiment
Furthermore, given the level of 30-day MVRV as of press time and BTC’s position in overbought territory, it is reasonable to expect a potential correction.