On-chain analytics firm Santiment has explained how Bitcoin could currently be undervalued based on its 4-year correlation to Gold and S&P 500. Bitcoin Has Underperformed Against Gold & S&P 500 Recently In a new post on X, Santiment has discussed about BTC’s recent trend relative to Gold and S&P 500. Historically, the cryptocurrency has shown some degree of correlation to these assets, but the pattern has shifted lately. Related Reading: Bitcoin Spot Demand Growing For First Time Since Early October: CryptoQuant Head Any two given assets are said to be “correlated” when one of them reacts to movements in the other by showing volatility of its own. As the chart shared by Santiment shows, Bitcoin has diverged from the traditional assets during the last few months. From the graph, it’s visible that Bitcoin has overall gone down 15% since August 11th. In the same window, the S&P 500 and Gold are up 7% and 21%, respectively. Gold has been the clear winner, but the S&P 500 has also at least managed a profit. The same is clearly not true for the number one cryptocurrency, which has gone the opposite way. The different trajectories of the assets would imply that they are no longer correlated or only have a negative correlation. Based on the fact that Bitcoin has shown tight correlation to the two over the last four years, however, the analytics firm has said, “BTC is arguably being undervalued.” It now remains to be seen whether the cryptocurrency’s price will eventually close the gap to the others. In some other news, BTC is trading between two key on-chain price levels right now, as on-chain analytics firm Glassnode has pointed out in an X post. The levels in question are part of the Supply Quantiles Cost Basis Model, which maps out various Bitcoin price levels according to the percentage of the supply that will be in profit if BTC were to trade at them. Bitcoin broke above the 0.95 quantile during its rally to the new all-time high (ATH), meaning more than 95% of the supply entered into a state of unrealized gain. With the drawdown that the coin has faced since then, its price has slipped not just under this level, but also the 0.85 quantile, corresponding to supply profitability of 85%. Related Reading: XRP To $10? Analyst Reveals What Could Be The Spark This level, currently situated at $108,500, could act as a barrier preventing upward breaks. In the down direction, the 0.75 quantile is present as a cushion around $100,600. “These levels have historically acted as support and resistance, with a break of either likely to define the next directional trend,” explained Glassnode. BTC Price At the time of writing, Bitcoin is floating around $105,000, up 2.5% over the last seven days. Featured image from Dall-E, Glassnode.com, Santiment.net, chart from TradingView.com
Data shows the correlation between Bitcoin and Gold has turned negative, a sign that the two assets are moving in the direction opposite to each other. Correlation Coefficient Is Now Underwater For Bitcoin & Gold In a new post on X, CryptoQuant community analyst Maartunn has talked about the latest trend in the Correlation Coefficient between Bitcoin and Gold. The Correlation Coefficient is a tool from statistics that measures the relationship between two given variables over a given period, typically one month. In the current case, the variables are the prices of BTC and Gold. Related Reading: Dogecoin Signal That Nailed The Top Says It’s Time To Buy When the value of the metric is positive, it means the price of one asset is reacting to movements in the other by traveling in the same direction. The closer is the indicator to 1, the stronger is this relationship. On the other hand, the coefficient being under zero implies there exists a negative correlation between the two assets. That is, they are moving opposite to each other. The extreme point for this side lies at -1. There also exists a third case for the Correlation Coefficient: a level exactly equal to zero. Such a value indicates no correlation whatsoever exists between the assets. In other words, their prices are independent of each other. Now, here is the chart shared by Maartunn that shows the trend in the Bitcoin Coefficient Correlation for Bitcoin and Gold over the past year: As displayed in the above graph, the Correlation Coefficient between Bitcoin and Gold shot up to a high above 0.5 back in June, suggesting the assets’ prices were tied to some degree. Following this peak, however, the correlation between the assets began to weaken, with the metric’s value slipping down. For a while it maintained inside the positive territory, but recently, that has changed. Related Reading: Bitcoin Whales Cut Back: Average Holdings At Lowest Since 2018 Gold has seen a price rally while BTC has been facing bearish action, resulting in the Correlation Coefficient turning slightly negative. This is the first time since February that the indicator has gone underwater. For now, the two assets are almost independent, but it remains to be seen whether the negative correlation will continue to grow in the coming days. Gold is the traditional safe-haven asset, while Bitcoin is associated as its digital counterpart. Periods where the two assets diverge can challenge the narrative for BTC. BTC Price At the time of writing, Bitcoin is trading around $110,100, down almost 2% over the past week. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com
A senior researcher at Glassnode has challenged the idea that the Bitcoin price is correlated to US money supply or other major economies. No Structural Link Between Bitcoin & Money Supply Of Major Economies In a new post on X, Glassnode senior researcher CryptoVizArt.₿ has talked about the Correlation between Bitcoin and the money supplies of the Group of Seven (G7) economies. The “Correlation” here refers to an indicator that measures how tightly together the prices of two given assets are moving. When the value of this metric is positive, it means the price of one asset is reacting to movements in the other by moving in the same direction. The closer the indicator is to 1, the stronger the relationship. Related Reading: This XRP Signal Consistently Foreshadows Price Jumps: Analytics Firm On the other hand, the indicator being under the zero mark suggests a negative correlation exists between the prices. That is, they are moving in opposite directions. This behavior is the strongest at -1. Now, here are the charts shared by the analyst that provide a few representations of the Correlation between Bitcoin and the money supply of each G7 nation over a 90-day rolling window: As is visible in the graphs, the Correlation between Bitcoin and the money supplies of seven of the world’s largest economies has swung wildly over the years. Often, periods of positive values of the metric are succeeded by a phase of negative or neutral levels, with there being no clear macroeconomic triggers behind the shifts. “Bitcoin’s correlation with US M2 or other major economies’ money supplies demonstrates no consistent or predictive pattern,” notes the Glassnode researcher. A longer-term view through a 180-day rolling window also shows the same. “Despite frequent claims of a stable linkage, the data suggest the relationship is largely stochastic rather than structural,” says CryptoVizArt. While Bitcoin is certainly not independent of the global economy, this pattern would suggest that there is a mix of several other factors that also play a role in driving the coin. Related Reading: Dogecoin Is Right Where Past Bull Runs Have Taken Off: Analyst In an earlier X post, the analyst shared the trend in the 180-day Correlation between Bitcoin and two traditional assets: Gold and S&P 500. From the topmost chart, it’s visible that Gold and Bitcoin have seen their 180-day Correlation stand at a neutral level most recently, indicating that the two have pretty much been moving independently of each other. Meanwhile, the second graph shows a notable positive value for the metric between S&P 500 and BTC, implying the cryptocurrency has been moving in tandem with stocks to some degree. BTC Price Bitcoin crossed above $122,000 during the weekend, but it would appear the asset has kicked off Monday with a retrace as its price is back at $119,000. Featured image from Dall-E, chart from TradingView.com
Data shows Altcoins are breaking away from Bitcoin’s lead. Here’s what that could mean for the market, based on historical trends. Altcoins Are Witnessing A Fast Drop In Correlation To Bitcoin In a new post on X, analytics firm Alphractal has discussed how the Correlation between Bitcoin and the altcoins has changed recently. The Correlation is an indicator that keeps track of how tied together the prices of any two assets are. The metric can take on both positive and negative values. In both cases, some relationship exists between the assets, but the relative movement in their prices is different. Related Reading: This Ethereum Metric Called The Bottom Ahead Of Rally, Says Analytics Firm When the indicator has a positive value, it means one asset is reacting to movements in the other by moving in the same direction. The closer is the metric to 1, the stronger is this relationship. On the other hand, it being under zero suggests a negative correlation exists between the assets: they are moving in opposite directions. In this case, the extreme point lies at -1. If the Correlation is sitting exactly at zero, it suggests no relationship exists between the two prices at all. In statistics, this condition corresponds to the variables being independent. Now, here is the heatmap shared by Aphractal that shows the trend in the Correlation between Bitcoin and the various altcoins in the sector: As is visible above, the Correlation between Bitcoin and the different altcoins was close to 1 just earlier, but the indicator has seen a quick decline since then. The average value of the indicator for the two has now dipped toward the zero level and has even turned slightly negative. This change would suggest that while the altcoins were closely following the footsteps of the original cryptocurrency before, they are now following a chart that’s more or less independent. This trend, however, may not actually be a positive sign for the sector. “Historically, low correlation is a red flag,” explains the analytics firm. “It often precedes periods of high volatility and mass liquidations — whether from shorts or longs.” From the chart, it’s apparent that the last time the Correlation between Bitcoin and the altcoins plunged to zero was back in May, and what followed was a price jump for the asset. In January, the same trend marked the market top instead. Related Reading: XRP MVRV Ratio Flashes Signal That Last Led To 630% Surge The latest low Correlation between BTC and the alts has come as various assets have broken out and market dominance has seen a shakeup. “Altcoins have been outperforming Bitcoin in recent days, with daily signals suggesting it’s been more profitable to stay positioned in altcoins rather than BTC,” notes Alphractal. BTC Price At the time of writing, Bitcoin is trading around $118,000, down more than 2.5% in the last week. Featured image from Dall-E, Alphractal.com, chart from TradingView.com
Bitcoin has been showing notable correlation to the stock equities recently, but data shows Ethereum is charting a more independent path. Bitcoin & Ethereum Showing Different Degrees Of Correlation To Other Assets In a post on X, the institutional DeFi solutions provider Sentora (previously IntoTheBlock) has talked about how the latest Correlation Matrix has looked between the two largest cryptocurrencies, Bitcoin and Ethereum, and traditional markets. The “Correlation Matrix” here refers to an indicator that tells us how closely tied together the prices of two given assets currently are. When the value of this metric is positive, it means the assets are reacting to moves in each other by moving in the same direction to some degree. The closer the metric is to 1, the stronger the relationship. Related Reading: Bitcoin & Stablecoin Reserves Diverge On Binance: Liquidity Explosion Brewing? On the other hand, the indicator being under the zero mark implies there is a negative correlation between the two prices. That is, they are moving in opposite directions. For this side of the scale, the extreme point is -1. Naturally, the Correlation Matrix showing a value exactly equal to zero suggests there is no correlation whatsoever between the assets. In statistics, the two variables are said to be ‘independent’ in this case. Now, here is the table shared by Sentora that shows how the Correlation Matrix of Bitcoin and Ethereum stands with respect to some traditional markets: As is visible above, the index that Bitcoin and Ethereum have the strongest positive correlation to is DAX. That said, the Correlation Matrix stands at 0.46 for ETH, meaning that while some correlation does exist, it’s not too intense. This isn’t the case for Bitcoin, which has the indicator sitting at 0.85, indicating its price is pretty in tandem with DAX. Likewise, BTC has a notable correlation to other stock market indices, with a metric value of 0.7, 0.68, and 0.69 for the Russel 2000, S&P 500, and Dow Jones Industrial Average, respectively. In contrast, Ethereum is almost fully independent from these indices, with the indicator standing quite close to zero for each of them. For US Dollar Index and VIX Index, the last two markets listed in the table, the Correlation Matrix is inside the negative zone for Bitcoin. This means that the digital asset has actively been moving against these indices. Related Reading: Ethereum ETF Inflows Hit 8-Week Streak—Institutions Still Buying “Right now, the spotlight is on the U.S. Dollar Index (DXY): if geopolitical and macro tensions drag the dollar lower, that backdrop could create room for another leg higher in BTC,” notes the analytics firm. Just like with the stocks, Ethereum is displaying little correlation to DXY and VIX, further reinforcing that the cryptocurrency has been following a trajectory of its own recently. BTC Price Bitcoin is mounting another bullish push as its price surges to $109,400, but it remains to be seen whether its fate will be any different from the weekend move. Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
Data shows the Correlation between Bitcoin and S&P 500 has declined to zero recently, a sign that BTC is no longer attached to the stock market. Bitcoin Correlation To S&P 500 Has Witnessed A Plunge Recently In a new post on X, the market intelligence platform IntoTheBlock has discussed about the trend in the Correlation between Bitcoin and S&P 500. The “Correlation” here refers to an indicator that keeps track of how tied together the prices of any two given assets are. Related Reading: Toncoin (TON) Investors Sitting On 54% Profit Despite Price Plunge When the value of this metric is positive, it means the price of one of the assets is reacting to movements in the other by traveling in the same direction. The closer is the indicator to 1, the stronger is this relationship. On the other hand, the metric being under the zero mark implies that while there is also some correlation present between the assets in this case, it’s a negative one. This suggests that the charts are moving in the opposite direction to each other. For this zone, the extreme point is -1, corresponding to the tightest relationship. Now, here is the chart for the Correlation shared by the analytics firm, which shows the trend in the metric’s value for Bitcoin and S&P 500 over the last few months: As displayed in the above graph, the Correlation between Bitcoin and S&P 500 rose close to the 1 mark during January, which means the prices of the two were showing a strong positive relationship. Since peaking at the start of this month, though, the indicator has observed a sharp downward trajectory, and its value has today come down to exactly zero. Such a value implies there is no correlation whatsoever present between the assets. In statistics, the variables are said to be independent in this scenario. The Correlation can be a useful indicator to watch for when an investor wants to diversify their holdings. Assets that have a close relationship may not be worth investing in at the same time, but ones that have a low value of the metric can make for smart diversification options. As it is currently, the S&P 500 could provide something different to Bitcoin investors and vice versa. Related Reading: Bitcoin Retail Volume Close To Growing Again: Bullish Sign? “The last time we saw such a low correlation was on November 5th, 2024, just before Bitcoin soared past the 100k mark,” notes IntoTheBlock. With BTC free from the stock market once more, it’s possible that the cryptocurrency could show a big move this time as well. It only remains to be seen, however, how long the coin can stay away from the influence of traditional assets. BTC Price Bitcoin has continued its recent trend of consolidation during the last few days as its price is still locked around the $96,000 level. Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
Bitcoin has surged past its all-time high again, reaching an impressive $108,300 and solidifying its position as the market leader. This rally marks a continuation of Bitcoin’s push into price discovery, fueled by growing investor demand and positive global market sentiment. Notably, many major markets, including U.S. stocks and gold, are also experiencing upward momentum, […]
Data shows the relationship between Bitcoin and Gold has been growing deeper recently as their 60-day correlation has been riding an uptrend. Bitcoin Has Been Becoming Increasingly Correlated To Gold Recently In a new post on X, Kaiko has discussed about the latest trend taking place in the correlation for Bitcoin and Gold. The “correlation” […]