Bitcoin (BTC) has started to decouple from the US SP 500 stock indexAccording to crypto statistician Willy Woo.
The first signs of decoupling behavior were noted between BTC and stocks. Buying through an influx of new users provides price support that prevents speculators from trading the downward correlation. The NVTP is approaching a BTC rating at the speed of an organic investor on the blockchain. pic.twitter.com/AvilB9cfdD
– Willy Woo (@woonomic) October 29, 2020
Prediction of this behavior at the end of September, he claimed What Bitcoin will disconnect from traditional markets due to the influx of new users:
“Bitcoin will soon decouple from traditional markets, but will be driven by its internal S-curve acceptance curve (think startup-style growth) rather than changing the perception of traditional investors as a hedging tool.”
Referring to the Network Value to Transaction Ratio (NVT), an indicator that Woo introduced In 2017, the analyst said that Bitcoin’s NVT price has shown significant price support despite the sharp drop in the SP in recent days.
NVT can be compared to Bitcoin’s P / E ratio (price / earnings)However, since Bitcoin is literally not making a profit, Woo replaced the network value (Bitcoin market capitalization) and daily volume of on-chain transactions in USD with the P / E ratio.
Two days ago, Bitcoin’s NVT (Support Price) fell to a new all-time level over $ 11,000.
Courting added What Indicators suggest that Bitcoin could regain its “safe haven” status if values continue to decline:
“What this test shows is that when stocks fall, Bitcoin is perfectly good safe haven real estate because of its large acceptance curve that is consuming more and more capital.”
On October 26th, Morgan Creek Digital became a co-founder, Anthony Pompliano stated that “Bitcoin is the ultimate refuge and the market is showing it”, Add that Bitcoin “could no longer be removed from the exchange”.
Not everyone agrees that Bitcoin had to decouple – the analyst Scott Melker tweeted in May that stocks and bitcoin “are now uncorrelated, and they were also uncorrelated before.”
The crypto investor started last week Chris Dunn He suggested that a negative correlation between stocks and BTC had begunwhat led Woo to it to repeat his stance on Bitcoin as a safe alternative to traditional assets:
“It makes sense that BTC should continue to correlate in short-term trading, but not longer-term. BTC is a safe haven, only the ‘risk’ (meaning that it is very new) distorts that fact. “
However, Some analysts have suggested that excessive concern about the correlation between BTC and the SP 500 could be dangerous. Analyst Michaël van de Poppe said that When things get ugly, like they did in March of this year, “all correlations tend to go towards 1” Add:
“Since then, gold, silver and Bitcoin have been resistant to any downward movement and have shown strength alongside the stock markets. Don’t look at these connections. “
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