The COVID-19 “lockdown discount” is now gone. Businesses are opening all over the world and subsequently, it is bringing back the bullish sentiments price to the crash as well.
Yesterday, Bitcoin broke above $10,000 for the second time after the crash to lows at $3850 on Black Thursday crash of March 2020. NASDAQ index is also at par with the ATH levels (at $120 per/index) attained before the crash, with the overall S&P 500 held back 10% only by the energy and consumer businesses.
Moreover, gold is trading 40 points above the high levels before the COVID crash. Hence despite the revival in stocks, the tremendous money supply and social unrest continues to add uncertainty in the markets.
SPX Correlation
Bitcoin investors are primarily looking for non-correlation with the stock markets. Nevertheless, due to the risk associated with Bitcoin, it seldom finds a correlation with stock market trends.
As reported earlier on CoinGape, halving had been a significant catalyst in breaking the correlation with stock markets. Seems like the positive appetite for investment in stocks and subsequently Bitcoin is back. Mati Greenspan, leading financial analyst and founder of Quantum Economics tweeted,
Direction: still correlated.
Percentage: not so much.
Showing bitcoin (orange) vs the S&P500 (blue) since the lows on March 16th.
Past performance is not an indication of future results. pic.twitter.com/A4SepQbXur
— Mati Greenspan (tweets are not trading advice) (@MatiGreenspan) June 2, 2020
How Gold can Guide the Markets?
There is a lot of uncertainty at the moment. Hence the volatility around price is significant as well. However, give the current economic and social unrest in the U.S. (also, Hong Kong), the mistrust in the Government and its authority is adding to the positive outlook around gold and Bitcoin.
Another Bitcoin bull, Michael Novogratz is bullish on the fundamentals. He says,
$BTC is coiling. It will take out 10k soon. All the tragic turmoil in the USA adds to the narrative. Budgets are going one way and it’s the opposite of balanced. When 10k goes it will move fast. Get on the train. He added, Also watch Gold vs Bitcoin. Of that chart breaks higher it will turbo boost Bitcoin.
According to him, an uptrend in gold is likely to boost Bitcoin prices as well. Gold has been holding onto its highs, at the moment. The price action in the asset in the following weeks will be significant as gold has broken above the pre-COVID high at $1700, up to $1750.
An uptrend in SPX and gold is acting as a strong positive catalyst for Bitcoin’s rise. Nevertheless, a drop in either assets (gold or SPX) at the moment could trigger a Bitcoin sell-off as well. More likely, if it is the case with Gold.
Will Bitcoin Break above the Swing Highs around $10,500 as well? Please share your views with us.
