Topic: Is Bitcoin in for another low? (Read 268 times)

@exstasie

We just have a different opinion of what correlated markets are. I've been involved in day trading for a very long time and we talk about correlated markets in terms of things that move in sync most of the time and have short periods where that correlation can be broken. (Or have an inverse correlation.). We sometimes even use this to take a signal to enter a trade on one market based on another slightly leading on a particular day. I don't see any possibility to do that using stocks and Bitcoin. If you view it in terms of an overall trend then we're just talking at crossed purposes.

I agree about the news but that doesn't undermine that fundamentals drive markets. I see completely different fundamentals driving these two markets, but that just an opinion.

See the bolded statement above. If two markets don't react to one another to the day, it doesn't follow that they are broadly uncorrelated. Furthermore, it's pretty silly to try to attribute every move to news. That's just not how markets work. There's nothing funnier than watching news media trying to explain price action.


Sure it does. Correlation just measures how close two things are to having a linear relationship. Divergence over time would break the correlation, but that hasn't happened. We're not talking about causation. What I'm suggesting is they both might react to macroeconomic conditions and catalysts (resulting in positive correlation but not causation).

Markets are very complex, interconnected organisms. I'm talking about money flow on a macro, global level. You're talking about news and matching charts up with short term candles. What I'm talking about is a lot more abstract than that.


In a technical sense, I'm fairly sure it does. It's also more than just the long term trend; there are lots of shared consolidation periods. Anyway, a correlation isn't about causality. I'm not saying "the market's perception of the likely return in investing Amazon or Walmart affects the market's perception of the future value of Bitcoin." That's completely absurd.

What I'm saying is stocks don't necessarily exist in a vacuum. If Bitcoin has a different ecosystem, that doesn't mean it isn't approached as a speculative investment, much the same as tech stocks. That's why in a global crash scenario, I'm skeptical of the idea that Bitcoin will prosper. Economic crashes generally mean a flight out of risky assets. That's what I'm talking about. From that view, you might expect Bitcoin and stocks to have some level of positive correlation in either an exuberant market (like recent years) or a crashing market.

If I had enough time I could pull out lots of shorter timeframe charts showing that the turning points don't match and then digging through the news reports at the time to work out what caused them.

What I'm trying to say is the fact that two things are in a long-term bull trend doesn't make them correlated. The stock markets bottomed in March 2009 due to central banks quantitative easing. This provided a large amount of fiat that could be borrowed very cheaply. It depressed bond yields and other fixed interest product which resulted in large institutional investors being forced into riskier equity investments to find a return.

The banking crisis was equally the driver behind the creation of Bitcoin but its increasing value wasn't driven by pension funds looking for a better return than US Treasuries were giving. Equally the day to day fundamentals that affect the market's perception of the likely return in investing Amazon or Walmart has no bearing on the market's perception of the future value of Bitcoin. It lives in a very different ecosystem and just putting up two charts that go from bottom left to top right over a very long period of time doesn't prove a correlation.

As I said, "the long term trends are pretty obviously correlated." But I think you're reaching a bit trying to attribute causation for stock market moves and suggesting on that basis alone there is no relationship. Pulling out one short term chart really doesn't tell the story. Those moves aren't necessarily relevant to money flow on 1-month or 1-year charts, and they don't speak to the idea of overall money flow into risky assets. Risky assets include overinflated stocks and cryptocurrency alike.


That's not really what I'm saying. What I'm saying is that the context for a stock market crash is risk off, flight to safety, in a global sense. The relationship between stocks and BTC would be indirect.

I don't think saying that bitcoin will crash because of the stock market dipping is a fair conclusion to draw.

But anyhow, there is a possibility that we're heading for another low, though definitely not because of the stock market. Since we're still consolidating at the moment after the huge bull market of 2017, I think after this pump there may be a good amount of time where we go back to the bearish sentiment that dominated the first few months of the year.

That is if bitcoin is unable to break the $10k barrier, which isn't guaranteed 100%. If bitcoin does dip further, don't panic, but instead think of the accumulation opportunity that is available during the dips.

I agree with the poster who says it is now looking like an over-priced asset.  If it doesn't go up in price what exactly is it's purpose. 

I would say that they are only correlated in as far as they have both been in long-term bull trend since the 2008 financial crises. Although those bull trends are fuelled for very different reasons. If you look at shorter timescales you will find that turning points happen at different times because the markets are driven by very different fundamentals.

For instance, the turning point at the $20k peak in BTC came on 17/12/2017 (the day CME futures opened) fuelled by peak FOMO whereas the stock markets turned on 26/01/2018 on geopolitical tensions (Trump/Syria/Russia) and fears on a tariff trade war.

https://www.tradingview.com/x/sz337lGU/

Over what time period? Overlaying can also be problematic if not scaled correctly. I've seen some fairly compelling cases made, although the 2014-2015 bear market was a divergence. For comparison, Bitstamp vs. the SPY:



The long term trends are pretty obviously correlated, but we don't know the underlying cause. I think the general belief is about overall money flow into risky assets. It would be interesting to see what happens in a true global economic crash with financial contagion.


And what if this plays out like 2014? Or 2011?!

Well that's how they play the market. Shifting funds around and follow the money. So I wouldn't be surprise by this kind of analysis, however, it should be the other way around at stocks market have been crashing lately and crypto is gaining momentum now. So they are not moving out funds from the crypto market they maybe just playing around and see where the most money is and right now its on crypto that's why we have been recovering since the 2nd week of April. As far as May, its too early to tell, but let's just be positive and hope that the price could hit $10K at least.

I think no one needs to dread the month of May. Selling right now is only a good idea when you will gain profit out of it, if not just hold and get some fiat ready. In case it dumps, it is a good opportunity to buy up some cryptos. Nevertheless, I think market would not be driven down. Instead, I think that might drive price up considering some stock investors will look for other trades to profit from, and crypto is one option.

OP, the "big dip" to the lows is absolutely done. Buy mow while the price is under $10,000 still. You would not want to be one of those people who wished he bought "low". The same with the people who regret buying under the magic numbers, $100 and $1000.

No, for the price of Bitcoin is at the increasing path and will still increase. Yes, if the demand suddenly decreases and the market rice falls but it is out of mind and the demand can not suddenly falls so the value of Bitcoin will continue to grow more and the investors are enjoying their time and holding for the price to jump again back at its highest price.

If there was any correlation you would be able to see it by overlaying the charts. I played about with that a bit over the weekend and there absolutely isn't any correlation there.

I'm still not entirely convinced with what exactly the correlation between the stock market and bitcoin markets are, because there is still a lack of institutional investors that are actually actively invested in bitcoin. Plus, we don't know what they would actually do in a bear market situation, there is simply not enough data to gather from.

But simply from analyzing bitcoin's native markets, I think we are definitely going to see some drop offs from the amazing recovery we've had from the $6k bottom all the way up to $9k+ that we are sitting on right now.

And it's not going to be caused by May being historically bad for the stock market or whatever. It's just because I don't think that we're fully out of the bearish sentiment yet, and we're struggling to push over the $10k resistance, which may lead to a pretty sizable dump in May.

Well, stock market is performing well now and so do the cryptocurrency market and an intelligent investor would always buy when the market is at its low and they sell when the market is at its high.

Yeah in this kind of market, it's better to think like the whales instead of reacting to what they do to the market. We won't know if it can go down again below the lowest this year, but it's important that we know how to react accordingly to whatever happens whether it drops or shoots up

Maybe it might make some little correction along the line and we are not afraid of that as we actually need retracement in other to be able to gather momentum for future price progress. We should not be worried about this as this has happened several time.  I will still advice is to keep holding as whenever you sell you are part of the reasons why price is going down.

You have point we already saw this bitcoin in a higher price and lower price. Accept the fact that price is very unpredictable any moment it will become low. If low more chances for the whales to buy btc and yes I think all time high will really achieve.

there is absolutely no correlation between the stock and crypto markets whatsoever and there has never been any.

but for the past 4 months some people have been trying to say there is a direct relation between the two markets so hard. and i still don't know why!

what is the definition of Moon ?
are you talking about it will creates its new ATH in May ? if you are saying that,i must say that it won't happens because we're in on recovery mode.
based on our market we should reach $10.000 and if the trend changes,
we may see it in around $12.000 in May,but we know nothing about the trend right now.
and from what i heard,
those newly investor who joined the train used short on their position,that was why we could see a lot of bears.
they thought it was an overpriced asset.