The Correlation Has Broken

It is worth noting today that the two month long correlation between stocks and cryptocurrency has begun to diverge. Since early December both asset classes have moved in virtually lock step with one another during trading hours. They are both functioning a "risk on" asset classes. I've noted this in past posts going back to the December 3rd U.S. Jobs report.

Why has cryptocurrency cared about U.S. Jobs? Because the Fed is looking at those numbers to raise interest rates.
Why has cryptocurrency cared about the Fed raising rates? Because "institutional involvement" means buying cryptocurrency on low interest rate credit. That environment is now going away.

Today as the stock market continues its rally off the correction cryptocurrency has stalled. BTCUSD and ETHUSD got to a key Retracement Resistance and held while stocks pushed higher. This shows a meaningful divergence in the two asset classes where stocks are beginning to recover faster than cryptocurrency.