Bitcoin's Correlation With US Stocks Hits Two-Year High Amid Positive Market Sentiment

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Bitcoin recently surged past a key resistance level, extending its upward trend. Notably, the cryptocurrency's correlation with US stocks has reached a two-year peak, indicating Bitcoin is increasingly mirroring traditional financial markets. While both assets have shown parallel trends reflecting similar market sentiment, Bitcoin's inherent volatility results in more pronounced price swings.

recently broke through a significant resistance level, continuing its positive uptrend on the charts. Interestingly, the cryptocurrency’s correlation with U.S stocks has climbed to a two-year high too. This means that Bitcoin is increasingly moving in tandem with traditional financial markets.On the contrary, the S&P 500 has exhibited steady performances with less pronounced volatility, compared to Bitcoin.

While BTC’s inherent volatility results in slightly more pronounced movements, the parallel trends indicate that it is currently behaving like a risk asset. One closely following macroeconomic trends and investor sentiment.price trend suggests a “risk-on” environment, one where investors maintain or slightly hike their exposure to traditional equities and cryptocurrencies. BTC could benefit from the positive sentiment if the S&P 500 continues its steady performance or improves.

As the correlation persists, Bitcoin’s price movements may increasingly mirror those of traditional equities. In times of rising stock markets, this can be bullish for BTC, as a risk-on sentiment drives more inflows into BTC and other crypto assets.However, the price briefly touched the $66,000-level before settling around $65,789. At the time of writing, BTC was trading at approximately $65,660, following a slight decline of less than 1% on the charts.

When the ATR is low, it may indicate that the asset is gearing up for a breakout in either direction.Adewale is a full-time journalist at AMBCrypto. While he is increasingly fascinating by the world of blockchain and cryptocurrencies, Adewale holds a degree in International Relations. Besides working on insightful articles that touch upon the crypto-space's hottest issues, he finds joy in supporting Manchester United and Afrobeat music.Subscribe to get it daily in your inbox.

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