Bitcoin stock market Correlation Decoupling

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

Since when? If you make a claim like this you need to provide a data point to back it up or some evidence so people are on the same page as you. Every chart I've seen shows btc correlated with stocks generally. And if people are treating btc as an investment class, you would expect to see that. There is no decoupling.

wxa7115

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Quote from: Darker45 on October 20, 2020, 09:19:07 PM

They always have their own separate ways, of course. But sometimes they also move in the same direction. And sometimes they don't. The correlation as well as the decoupling that you are talking about are both temporary. Which could mean that despite an occasion or two where there is recorded peaking and bottoming of both Bitcoin and S&P 500 at almost the same time, everything might just simply be spurious correlation.

At the beginning bitcoin seemed to be an asset that had a negative correlation to the stock market and most people interpreted this as a sign that bitcoin will do well under the scenario of an economic crisis, however as institutional money has come to the market we are seeing that instead of a negative correlation we are seeing a positive correlation and it makes complete sense if you think about it.

If the same people are invested in the stock and the bitcoin markets then if the stock market goes down then the people that are invested in both markets and got profits out of bitcoin will sell their positions in order to cover some of the losses they had making the price of bitcoin to go down with some slight delay compared to the stock market, this does not mean there is something wrong with bitcoin it just means some people are trying to recover some of the money they lost and bitcoin is just on the middle of all of this.

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

This could be good news, but I am not sure if this is a really long term effect. So far we have seen this year that correlation between stocks and bitcoins is quite high. I think there still plenty of people out there who view Bitcoins as an risky investment. So with the pandemic still ongoing the traders could be even more trigger happy to sell their risky assets. I would assume that they do so across the board, selling stocks, high risk bonds, crypto currencies, futures and options, all at once. Which would lead to this high correlation we are seeing at the moment.

Buttermellow

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why are they using the same network or do bitcoin include in the stock market? If so if bitcoin is good then so does the stock market. However, I do believe that they are not correlated as what you have said that bitcoin and stock market starts decoupling. We can expect that both were not dependent on each other.

Well, I just hope that bitcoin will do more good because as cryptocurrency user all cryptocurrency will going to benefit as bitcoin goes high. This is all are wanting to happen especially the bull run.

Wawa2013

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I don't think Bitcoin and the stock market are correlated, so it doesn't matter if they go their separate ways. And if currently Bitcoin
and stock seem to be going separate ways, it means that the two markets do not have a correlation. But everyone has the right to
have different opinions regarding the two markets, so there's no need to argue. Feel free to stick to your respective opinions, but for
now I prefer investing in Bitcoin. Because the Bitcoin price seems to be getting stronger and I am sure the Bitcoin price will continue
to rise until 2021.

Darker45

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They always have their own separate ways, of course. But sometimes they also move in the same direction. And sometimes they don't. The correlation as well as the decoupling that you are talking about are both temporary. Which could mean that despite an occasion or two where there is recorded peaking and bottoming of both Bitcoin and S&P 500 at almost the same time, everything might just simply be spurious correlation.

notblox1

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Let's wait for new stimulus package from United States and then we can talk more about decoupling or not.
One thing is sure that Bitcoin is looking very bullish now, and we should also not forget about gold.
I think dollar and other fiat currencies are getting weaker, and all other markets are reacting to that.

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

This happen many times and the adoption of cryptocurrency is increasing while many companies are still suffering from the effect of this pandemic and maybe this is why they are on a separate ways now. Give more time and we will see the bitcoin and stocks goes on both ways again, its just a matter of time and the market situation, it doesn’t mean too much for stocks and bitcoin.

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

I think its just random. Ypu can probably spot near term trends either way in regards to lining up or decoupling. Although I don't think either has an affect on the other people make good money following the trends with these 2 markets, i just think its too risky to believe they correlate

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Quote from: BrewMaster on October 20, 2020, 01:19:10 PM

just wait a month or two and then look back at the charts. there is a good chance that in the following months nobody remembers this new found "correlation" anymore because bitcoin could be back to its normal mode and everyone would be so busy thinking why they didn't buy when price was in $10k range and were waiting for bitcoin to drop just because some other market that had nothing to do with bitcoin had dumped. Wink

It's not a newfound correlation. It goes back to 2010, when BTC price discovery began. Stocks and Bitcoin have both been in raging bull markets ever since then. They crashed together this past March, and they've risen together ever since. In fact, it's US stock markets that are trading at new ATHs right now, not Bitcoin.

This so called "decoupling" is a matter of a couple days. It's meaningless compared to longer time frames. Give it time.

jacafbiz

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This is what I have been expecting for some time now, though argument can be made that since the March dump everything has been going up. If the stimulus is passed expect the correlation to be back because there will be some free money to play around

cryptoboss2020

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Quote from: so98nn on October 20, 2020, 02:16:12 PM

Quote from: BrewMaster on October 20, 2020, 01:19:10 PM

just wait a month or two and then look back at the charts. there is a good chance that in the following months nobody remembers this new found "correlation" anymore because bitcoin could be back to its normal mode and everyone would be so busy thinking why they didn't buy when price was in $10k range and were waiting for bitcoin to drop just because some other market that had nothing to do with bitcoin had dumped. Wink

Just now posted same stuff elsewhere. I am not sure why everyone has started to correlate the two markets so suddenly? Am I somehow missing any news here because this correlation is beyond comparison due to the fact that both the markets share no common thing except they are traded for one thing and that's "money".

All over the same SP500 and forex, and fortune companies in the role again. May be it's time everyone should think both the markets are completely and insanely different. There is no way they could possibly depend on each other as long as they don't start sharing the same platform and brokers I guess. Tongue

i think it shows people mindset, its money i guess people compare now if they should do both crypto and stocks, or just choose one.
i definately will do the stock trading but the crypto requires less capital and bigger volatility.

so98nn

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Quote from: BrewMaster on October 20, 2020, 01:19:10 PM

just wait a month or two and then look back at the charts. there is a good chance that in the following months nobody remembers this new found "correlation" anymore because bitcoin could be back to its normal mode and everyone would be so busy thinking why they didn't buy when price was in $10k range and were waiting for bitcoin to drop just because some other market that had nothing to do with bitcoin had dumped. Wink

Just now posted same stuff elsewhere. I am not sure why everyone has started to correlate the two markets so suddenly? Am I somehow missing any news here because this correlation is beyond comparison due to the fact that both the markets share no common thing except they are traded for one thing and that's "money".

All over the same SP500 and forex, and fortune companies in the role again. May be it's time everyone should think both the markets are completely and insanely different. There is no way they could possibly depend on each other as long as they don't start sharing the same platform and brokers I guess. Tongue

BrewMaster

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Quote from: carter34 on October 20, 2020, 01:29:00 PM

Quote from: BrewMaster on October 20, 2020, 01:19:10 PM

just wait a month or two and then look back at the charts. there is a good chance that in the following months nobody remembers this new found "correlation" anymore because bitcoin could be back to its normal mode and everyone would be so busy thinking why they didn't buy when price was in $10k range and were waiting for bitcoin to drop just because some other market that had nothing to do with bitcoin had dumped. Wink

Lol that is the side of the market that gets a large number of traders be in regretful mode. It is especially the newbies who come with such feelings too. Again many traders don't have strong understanding of the strategy they have. Like this time that is looking a good buy but fear is the challenge of many.

it is not just the beginners and newbies, it is also a lot of those with short memory who seem to have forgotten the bitcoin history and the price movements so far.
or maybe they are just going with this narrative because there is some benefits in it for them. i can't really tell their intentions but it is certainly very interesting to watch.

carter34

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Quote from: BrewMaster on October 20, 2020, 01:19:10 PM

just wait a month or two and then look back at the charts. there is a good chance that in the following months nobody remembers this new found "correlation" anymore because bitcoin could be back to its normal mode and everyone would be so busy thinking why they didn't buy when price was in $10k range and were waiting for bitcoin to drop just because some other market that had nothing to do with bitcoin had dumped. Wink

Lol that is the side of the market that gets a large number of traders be in regretful mode. It is especially the newbies who come with such feelings too. Again many traders don't have strong understanding of the strategy they have. Like this time that is looking a good buy but fear is the challenge of many.

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just wait a month or two and then look back at the charts. there is a good chance that in the following months nobody remembers this new found "correlation" anymore because bitcoin could be back to its normal mode and everyone would be so busy thinking why they didn't buy when price was in $10k range and were waiting for bitcoin to drop just because some other market that had nothing to do with bitcoin had dumped. Wink

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Quote from: Dorodha on October 20, 2020, 01:05:43 AM

BTC vs. Stocks Tolerance Decoupling is constantly being updated in that case Bitcoin is up and down depending on the trading charts and demand and not on the stock. Contrary to popular belief in the stock market and directly in conflict with the value of assets. When others are greedy the price of the stock goes up so the investor has to be careful not to spend too much to buy the stock. This can result in loss or damage again when the share price goes down then others are afraid to buy the shares and then is the right time to buy the shares.

From my views i comprehend that its based on market because market determine for us based on bitcoin going up and down, and I'm trying to understand that bitcoin increments of price really based on the demands and supply of it, because when the demands are higher, definitely bitcoin Will automatically rised up, not really on the stock many people emphasising on to get traffic.it's obvious that what actually activates Btc price, is the higher concentrations of it's demands.

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

And you're basing this nearly incomprehensible statement on what, exactly?

Furthermore, bitcoin and the stock market have never had a strong correlation as far as I know--but since OP is the one who's bringing this subject up, I would suggest that he ought to include some data in the form of charts instead of a few words with nothing to back them up.

Every investment asset class is more or less going up, though there are always dips in the price charts. And right now, the reason for everything increasing in price is because interest rates are so low and there's so much money being printed and given out as relief. You better believe a lot of that free (or cheap) money is finding its way onto the stock market, and into cryptocurrencies. Traders are shifting their assets around a lot these days, so it's no surprise when you find that there are periods of time when the S&P 500 (or whatever index you want to pick) doesn't correlate with bitcoin.

If you're investing/trading/speculating on the assumption that stocks and bitcoin should be correlated, you're in trouble.

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Sometimes they do respond positively at the same time. But many times we've seen that it doesn't. Bitcoin's up and nothing that much with the stocks.
We should stop looking at both rivers and compare the flow of it. Anyway, for someone who has both investments with it, well, it's important for you to assess and can't be avoided to compare their ups and downs.

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If you are interested in the correlation stuff, use SPSS or excel, and calculate whether the correlation is significant or not.
Drawing graphs are useless since correlation can be -1 < 0 < 1.

"Decoupling" could mean the correlation becomes negative for a certain period, but if you measure it monthly or yearly, it still can be positive.

hugeblack

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There is a state of uncertainty prevailing in the world so both stocks and bitcoins look the same despite the great difference between them. This matter will not continue for long, especially with the approaching end of the world and the news about covid19.

The charts do not follow each other consistently, but rather there is a lot of difference between them, so we cannot say that they are similar or carry the same rise / fall.

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

Bitcoin is still well corellated with S&P 500, the recent increase in price of Bitcoin was due to the recent news when Powell spoke in a panel hosted by international monetary fund about potential costs and benefits of Centra Bank Digital Currency for the US economy.
The last time i checked, Bitcoin performance was still tide to stock market. Check the image below, early this month, and increase in sp500 has always shift significantly to Bitcoin and vice versa.

Source:CryptoNews

That's S&P500 as line graph and Bitcoin as cadle chart and volume, there is slightly shift and deviation of Bitcoin from stock market in the second image, which of course everyone is waiting for the election day. Bitcoin will decide its new path after US election by November.
By the way, this is the first time Bitcoin Price Has Only Ever Spent 93 Days Above $11,500

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.
as btc vs stox Correlation Decoupling
what it could mean? Shocked

If BTC and stocks are sometimes positively correlated and sometimes negatively correlated, then they are ultimately uncorrelated -- by definition.

Dorodha

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BTC vs. Stocks Tolerance Decoupling is constantly being updated in that case Bitcoin is up and down depending on the trading charts and demand and not on the stock. Contrary to popular belief in the stock market and directly in conflict with the value of assets. When others are greedy the price of the stock goes up so the investor has to be careful not to spend too much to buy the stock. This can result in loss or damage again when the share price goes down then others are afraid to buy the shares and then is the right time to buy the shares.

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Quote from: cryptoboss2020 on October 19, 2020, 06:10:01 PM

so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

Give it a few more days.

Stocks and BTC have both been uptrending on the daily chart since late September. Both were just in a ~5 day pullback. BTC broke upwards again today, stocks just haven't followed......yet.

The S&P 500 is still holding comfortably above the 20-day and 50-day MAs and the previous trading range. I wouldn't get too bearish just yet.

cryptoboss2020

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so it look like the stock and btc go both separete ways.

as btc vs stox Correlation Decoupling
what it could mean? Shocked

Topic: Bitcoin stock market Correlation Decoupling (Read 279 times)