Last week saw a decline in its 30-day correlation with the Nasdaq to 0.26, the lowest level since early January. A value of 1 suggests that the two assets are moving together.
The correlation, which measures how well the two move in unison over a 30-day period, has been over 0.75 for the majority of the year and occasionally has been close to perfect unanimity, reaching 0.96 and 0.93 in May and September, respectively.
Any separation of Bitcoin from Big Tech is seen as a sign of strength by some crypto supporters.
“Investors are seeking the next growing industry as the latter’s growth has slightly peaked. One of the “next” growth businesses is bitcoin and cryptocurrencies “said Santiago Portela, the CEO of Web3 gaming network FITCHIN.
A year after the young cryptocurrency started its epic slide from the dizzying heights of $69,000 achieved in November last year, the fledgling uncoupling does actually coincide with a time of comparative quiet and stabilization.
As gloomy quarterly reports from Microsoft, Alphabet, Meta, and Amazon weighed, Bitcoin climbed more than 5% last week, surpassing the Nasdaq’s 2% increase. It is currently hanging near one-month highs around $20,500.
But the recent winter has been a really cold one.
According to CoinMarketCap.com, the overall market value of cryptocurrencies has decreased by more than a third to $984 billion from about $3 trillion in November 2021.
Data from CryptoCompare reveals that market activity has decreased as well, with the average daily trading volume of digital asset goods decreasing to $61.3 million as of October 25 from daily levels of almost $700 million recorded in November last year.
However, despite a dismal economic climate, months of repeated selling have not been able to shake off the experienced players, who are digging in.
According to blockchain analytics company Glassnode, the dollar worth held in bitcoins that haven’t been moved in three months or longer is at an all-time high, indicating accumulation by long-term investors or “HODLers”. Years ago, a trader’s misspelling of “hold” on an internet forum gave rise to the term for that group of fervent cryptocurrency investors.
Furthermore, analytics site CryptoQuant revealed that a record 55,000 bitcoin were taken from the biggest exchange Binance on October 26. Flows like this often indicate that coins are going to wallets for longer-term safekeeping.
Heavy withdrawals from exchanges, according to Samuel Reid, CEO of the research firm Geometric Energy Corporation, may be a sign that some significant purchasers have “sniffed out” the conclusion of the bear market.
But nobody can predict if erratic bitcoin will start to soar, sink once again, or quickly come back to the embrace of technology stocks.
Macroeconomics will continue to be the driving force behind a market that will likely always be very speculative.
According to Alex Miller, CEO of blockchain company Hiro Systems, “the more speculative crypto is, the more it is related to macro.”
