The price of Bitcoin (BTC) has increased in the last 48 hours as the United States stock market cautiously increased. The recent correlation between BTC and U.S. equities further intensified, showing a strong momentum in the cryptocurrency market.
Holger Zschaepitz, a market analyst at Welt, said:
“Global stocks drift as Sino-US tensions weighed on optimism generated by Wall St's tech-driven rally. Asia chip stocks lower after US announced new set of curbs on Huawei access to US technology. Bonds gain w/US 10y yields at 0.68%. Gold at $1993, Bitcoin stays >$12k at $12,254.”
Since April, Bitcoin has seen notable correlation with the S&P 500. Due to the plunge of all asset classes at the end of the first quarter of 2020, Bitcoin and stocks climbed upwards in tandem.
Buyers Are Propping Bitcoin Up, a Positive Sign
The correlation between the stock market and Bitcoin has been intact in the past week because of BTC’s abrupt surge to $12,400. On August 17, BTC surged from $11,775 to as high as $12,486 on Coinbase, recording a 3.2% gain.
The daily price chart of Bitcoin. Source: TradingView.com
Researchers at market analysis firm CryptoCompare said that buyers were proactively pushing Bitcoin upwards in the last 48 hours. They said:
“The percentage of Bitcoin bought vs sold surged before the first move up past 12k, suggesting buyers were propping the price up. Similarly, the second rally also saw the percentage of bought vs sold BTC rise before the price, again suggesting buyers were proactively pushing the price up.”
The U.S. stock market has risen in the past two days due to optimism towards the performance of “Big Tech.”
The stocks of Tesla, Alphabet, and Amazon increased by 11.2%, 0.77%, and 1.09%, respectively, buoying tech-heavy indices like the Nasdaq.
Pre-market data show the U.S. stock market awaits a slight gain at market open, with the Dow Jones and Nasdaq both set up for 54-point and 37-point gains.
The sentiment is positive, but will there be a pullback in September?
The price of Bitcoin is continuing to go up in tandem with the stock market, but some analysts are cautious about September. Historical data shows that September is typically the worst-performing month for Bitcoin.
If both the U.S. stock market and Bitcoin retrace, like gold, cryptocurrency analyst Edward Morra suggested that market turbulence might emerge. He wrote:
“If BTC and SPX will resolve like Gold did - then decent correction for BTC is in September, for SPX - November. For BTC - September is usually the worst months histrionically, for SPX - elections in November so might cause some turbulence.”
For now, the confluence of a simultaneous rally between Bitcoin and stocks and the noticeable increase in buying demand is buoying the sentiment around Bitcoin.