Critical correlation broken

By 02/11/2020News
Morning Stock News

Gold  1882,93

EURUSD   1,1634

DJIA  26496,50

OIL.WTI  34,495

DAX   11634,37

Only a couple articles ago we wrote about a new look at Bitcoin. We advise everyone who hasn’t looked to reread our newsletter. At the end of the week and at the weekend another important BTC event takes place, which is worth mentioning in detail.



Throughout 2020, the first cryptocurrency correlated with the S&P 500 index. Until mid-February, the index was growing, so was the Bitcoin. Then there was a powerful sell-off in the stock market associated with 1 wave of coronavirus, and BTC also collapsed powerfully. Then the economy started pumping money, stocks went up again and bitcoin was growing with it.
This week ended again with a massive sell-off of stocks. Bitcoin usually started falling after the stock market. But this time something went wrong. Following the fall of Wednesday night, Thursday night saw strong growth. Then on Thursday and Friday, Bitcoin tried to fall again, following the stock, but it bought back and grew back. And on Saturday the price hit all the stops and rose to $14100 for 1 BTC.

What does all this mean?

We forecast that the correlation between Bitcoin and the stock market has been completely broken. Moreover, BTC now does not correlate even with gold, which has also been declining recently. This means that Bitcoin is no longer even dependent on the amount of new money printed. We noted last week that the biggest fall on Wednesday in the stock markets was due to the postponement of the adoption of the new $2 trillion aid package for the US economy.
So speculators are trying to sell bitcoins, remembering the existing correlation. And “smart money” is happy to buy back the first cryptocurrency at any price. This shows that demand is really starting to exceed supply.

Where can this lead to?

In the first wave of the pandemic, investors sold all assets, received money and did not know what to do with them. Now the opposite situation can happen. In the second wave of the pandemic, investors will also sell all the assets and put the money into bitcoin. We will know whether this version has the right to live before the New Year.

What awaits us today?

10.00 EU Manufacturing Index for October
10.30 UK Manufacturing Index for October
16.00 US ISM Manufacturing Index for October

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