In recent weeks, cryptocurrency market analysts observed that Bitcoin and the stock market have been closely correlated. However, at the moment, there are signs that the correlation is breaking away as Bitcoin’s performance is sideways while the majority of equities have started to pick up some momentum.
While the recovery observed in the stock market is intense, it seems the momentum is coming up again as governments continue to open up places that have been locked down in the past few weeks. The observed momentum is based on the number of publicly traded companies whose stock prices have attained new lifetime highs.
On July 3, the number of common stocks that attained new highs on the NYSE was 59, showing that the traditional markets are recovering. Nevertheless, in spite of the correlation between the markets and Bitcoin in recent times, it is not likely to see it propelling Bitcoin to new highs.
The performance of both the traditional markets and BTC over the previous couple of months has been dull. Investors have been waiting to see more data on the long-term impacts of the pandemic on the economy. The stock markets seem to be incurring some momentum even with the employment data signaling a v-shaped economic recovery in spite of the pandemic still raging worldwide.
The latest Non-Farm Employment data shows the creation of 4.8 million jobs last month, which is higher than the expectations of economists. When the data was released, Bitcoin reacted slightly but in a fleeting manner.
From February to June this year, the correlation between Bitcoin and the equities market remained intact but as the latter is recovering at the moment, the former remains around $9.1k price level as observed on the chart from Skew. Hence, the persistence of this trend may lead to BTC’s failure to leverage the equities market’s rising momentum to initiate a market rally.