bitcoin has seen mixed price performance over the past seven days. In what seemed like a continuation of the recent recession, the world's largest cryptocurrency saw its value fall below $40,000 for the first time since December 2023.
However, the btc price seems to be recovering very well after reaching over $41,000 and even momentarily hitting $42,000 on Friday, January 26. Recent data shows that the leading cryptocurrency could follow in the footsteps of the S&P 500 stock index, which recently hit a new all-time high.
Is btc catching up with the stock market?
in a new release on platform, data analysis site Santiment highlighted how bitcoin could try to regain its correlation with the S&P 500, one of the most popular stock indexes. This index tracks the performance of 500 of the largest publicly traded companies in the United States.
According to the on-chain analytics platform, investor sentiment around bitcoin peaked in euphoria on January 11, the day after 11 spot btc exchange-traded funds were approved in the US. This development has seen the flagship cryptocurrency face significant downward pressure and a substantial price drop.
<img decoding="async" class="aligncenter wp-image-277292 size-large" src="https://technicalterrence.com/wp-content/uploads/2024/01/Is-Bitcoin-regaining-correlation-with-the-SP-500-after-a.jpeg" alt="bitcoin” width=”980″ height=”639″ srcset=”https://bitcoinist.com/wp-content/uploads/2024/01/GEzJfIcboAAubof.jpeg?w=1200 1200w, https://bitcoinist.com/wp-content/uploads/2024/01/GEzJfIcboAAubof.jpeg?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/01/GEzJfIcboAAubof.jpeg?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/01/GEzJfIcboAAubof.jpeg?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/01/GEzJfIcboAAubof.jpeg?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/01/GEzJfIcboAAubof.jpeg?w=1140 1140w” sizes=”(max-width: 980px) 100vw, 980px” data-recalc-dims=”1″/>
btc attempting to regain correlation with S&P 500 | Source: Santiment/X
The S&P 500, on the other hand, has performed well in recent weeks, showing a deviation in its correlation with the cryptocurrency market leader. According to the Santiment report, the stock index registered a new all-time high on Thursday, January 25.
Following bitcoin's recent resurgence, Santiment noted that bitcoin and other large-cap assets may “return to the mean and catch up with the stock markets.” Basically, this means that there is a chance for cryptocurrencies to come back in line with the performance of traditional stocks.
The relationship between the stock market and cryptocurrencies has been interesting for attentive to many investors. A weak correlation between the two asset classes is often seen as offering avenues for diversification for investors.
bitcoin Price Overview
At the time of writing, the price of bitcoin is $41,824, reflecting an increase of almost 5% in the last 24 hours. Although btc is quite far from its 2024 high of around $49,000, the recent rally has helped the top cryptocurrency erase most of its losses from last week.
According to data from CoinGecko, btc is up just 0.5% in the last seven days. Meanwhile, it continues to rank as the largest asset in the cryptocurrency sector, with a market capitalization of more than $820 billion.
<img loading="lazy" decoding="async" class="aligncenter size-medium" src="https://www.tradingview.com/x/YUYVAeU8/" alt="bitcoin” width=”2174″ height=”1434″/>
bitcoin price hovers around $42,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
