The Risk On/Off Correlation Between SPX and BTC.

3月11日

There are many people who think BTC not breaking under 10,000 again is a sure bet. Based on all the available info we have on how BTC performs while indices are weaker, it would seem to be highly likely if SPX traded over 40% off the high we'd see BTC under 10K. Based on all the available info a bet BTC will go up is a bet stocks won't significantly weaken.

There has not been an instance in BTC's trading history where stocks have been doing poorly and BTC has done well. When stocks have been even slightly shakey (Like 2013 time) there's been massive dumps in BTC.

Heading into the 2018 high where SPX had set a new record for low volatility and reversed causing the "Volmageddon", BTC began a prolonged bear market.

Then both would rally in 2019 before crashing on the covid news.

In mid 2021 we started to get bubble and pops in individual stocks. Indices were broadly stable but during this BTC crashed. The ATH in a lot of cryptos was made at this time. BTC would manage to make another nominal new high but then the big downtrend would take effect when SPX had made its top and break in January of 2022.

The BTC downtrend would continue all the way to November of 2022 - where it would a low alongside SPX.

BTC has an established history of going up more than SPX when SPX is going up and going down more when its going down.

Correlation to Nasdaq is even closer.

There's no reason to assume based on the trading history we have that BTC will not continue to act as a risk on/off asset.

As go the indices, so goes BTC.