Data analytics provider, Santiment tweeted today that currently, the correlation between the exchange rate of Bitcoin and the stock market is higher than the historical norm. This has directly resulted in impacting the exchange rate of the leading cryptocurrency. 30-day Correlation Between Bitcoin and the Stock Market Notably High Satiment highlighted that the 30-day correlation between Bitcoin and the stock market is notably high. Numerous events across the world have got to do with this from the vaccine rollouts across the world to the passing of the $1.9 trillion stimuli by President-elect Joe Biden in an effort to revive the struggling economy. All this has pushed the inflation rate higher, resulting in huge sell-offs in the bond markets in recent weeks. Santiment noted that Bitcoin’s rallies tend to be the most prominent when the cryptocurrency’s correlation with the U.S. stocks turns negative, as seen in December 2020. While the current Bitcoin-stocks correlation remains high, Santiment pointed out that Bitcoin’s rally has coincided with a negative correlation in December 2020. The cryptocurrency spiked up from the $19,000 level to surpass the all-time high of 2017 when the cryptocurrency hit $20,000. On Jan. 4, Bitcoin surpassed the $34,000 level. A week later, it reached the $40,000 price mark and went on to reach one new all-time high after another. The most recent all-time high for Bitcoin has been above the $58,000 following the beginning of a price correction, with BTC trading approximately $10,000 lower now. Bitcoiners Continue to Buy the Dip The flagship cryptocurrency has declined from a $58,000 high and is currently trading at $47,586 at the time of writing. Analysts are of the view that despite the current Bitcoin correction, users and financial institutions keep buying the Bitcoin dip and withdrawing it from exchanges to cold storage wallets. The outflow of Bitcoin from trading venues still continues to remain high. Besides, Bitcoin holdings on Binance have risen 38% since March 2020 and have extended into 2021 as well. Meanwhile, Coinbase and other cryptocurrency exchanges are seeing massive withdrawals.
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