🔥WHY BITCOIN COPIES S&P500 MOVES: THE ANSWER WILL AMAZE YOU!
🔥Hi friends! I am sure that most of the traders want to earn more. I wrote this idea so that you could stay in the trend of new developments in the crypto market and understand the dependence of the crypto market on other markets.
Bitcoin began to copy SnP500 and this is a FACT. In order to understand why the price is copied at all, it is necessary to understand what the price is and how it is created.
🚩 I will not go into deep, fundamental knowledge of pricing. I will explain it very simply. In financial markets, pricing is mostly based on cycles of fear and greed of people. More greed - higher growth. Fear has a slightly different pattern. Usually the biggest fear is not during the fall or the maximum bottom, but during the rebound from the bottom.
✅ I think most of you understand these patterns.
📊 SIMILARITIES/DIFFERENCES BETWEEN BITCOIN AND S&P500
Let's move on to comparing the growth cycles (green areas) and the fall cycles (red areas). In total, I have highlighted 5 recent cycles (markets) for better illustration of the examples.
✅ As you can see, cycles 1, 2 and 3 almost do NOT coincide in all-time highs.
For example, the beginning of Bitcoin's fall in cycle 1 does not coincide at all with the fall of the SNP500, because the stock market was still growing and even renewed its highs.
🚩 In the case of Bitcoin and the SNP500, only large falls with major liquidations coincided. This is the end of cycles 1 and 3. When the largest market in the world falls, it is copied by all world economies and markets. Even such a seemingly new and independent cryptocurrency market. As I said, everything is based on fear and greed.
✅ Cycle 4 and 5 exactly coincide with the local bottom and all-time highs.
🚩 Many traders are already looking at the opening and closing of the US stock market to identify the direction of Bitcoin and other cryptocurrencies.
Pay attention to the correlation data. At the beginning of November, the correlation is 0.69 or 69%. This is a high correlation!
The highest correlation was in mid-October. The correlation of Bitcoin and the SNP500 reached 89%! This is almost a direct copy of the price movements.
📊 WHY DOES BITCOIN START COPYING S&P 500 MOVES?
I discovered this answer for myself several years ago when studying different markets in search of the perfect strategy.
✅ The price of Bitcoin follows the movements of the S&P 500 due to the fact that many institutional traders, whales and funds came from the stock market to the cryptocurrency market. This means that each asset has its own character, but it can change over time depending on the habits of most players.
For example, you have definitely seen such altcoins that grow while 99% of other crypto is falling. The fact is that traders who trade this particular altcoin have a different nature and reasons to push the price. It is the same with falling altcoins in a bull market. Each asset has its own character, but it changes over time, which is what happened with Bitcoin.
🚩If earlier most of the players in the market were short-term traders who wanted to earn 100-200% in a few weeks, then the price grew in pumps and could fall 5-6 times a year by 40%. Now we see that the price grows by 100-200% in one move and begins to consolidate, which was not the case before. This is the influence of new players in the crypto market.
✅ If a few years ago, large funds were afraid to trade on the crypto market because of the risks and low liquidity for buy, then with the spread of blockchain and the growth of capitalization, they can no longer do without investing in crypto and lose such opportunities.
In confirmation of this, we see how the last cycles began to coincide and I probably have to say it, but it will continue. All financial markets are looking at the US economy, so this correlation will continue...but not always.
📊 WILL BITCOIN STOP GROWING AS MUCH AS BEFORE?
✅ Bitcoin will continue to grow by 600-700%. So far, 2 things allow it to grow so much:
1. relatively small capitalization
2. great popularity among traders, especially retailers
🚩 But how much you can earn in such a market depends on your preparation and training provided by professional traders, because they already know all these nuances and can share their experience. I am sure that some chips can increase your profitability by 25-35%.
Traders, was this idea useful for you? If you want to thank or add something, then write your thoughts in the comments!
💻Friends, press the "boost"🚀 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
Bitcoin began to copy SnP500 and this is a FACT. In order to understand why the price is copied at all, it is necessary to understand what the price is and how it is created.
🚩 I will not go into deep, fundamental knowledge of pricing. I will explain it very simply. In financial markets, pricing is mostly based on cycles of fear and greed of people. More greed - higher growth. Fear has a slightly different pattern. Usually the biggest fear is not during the fall or the maximum bottom, but during the rebound from the bottom.
✅ I think most of you understand these patterns.
📊 SIMILARITIES/DIFFERENCES BETWEEN BITCOIN AND S&P500
Let's move on to comparing the growth cycles (green areas) and the fall cycles (red areas). In total, I have highlighted 5 recent cycles (markets) for better illustration of the examples.
✅ As you can see, cycles 1, 2 and 3 almost do NOT coincide in all-time highs.
For example, the beginning of Bitcoin's fall in cycle 1 does not coincide at all with the fall of the SNP500, because the stock market was still growing and even renewed its highs.
🚩 In the case of Bitcoin and the SNP500, only large falls with major liquidations coincided. This is the end of cycles 1 and 3. When the largest market in the world falls, it is copied by all world economies and markets. Even such a seemingly new and independent cryptocurrency market. As I said, everything is based on fear and greed.
✅ Cycle 4 and 5 exactly coincide with the local bottom and all-time highs.
🚩 Many traders are already looking at the opening and closing of the US stock market to identify the direction of Bitcoin and other cryptocurrencies.
Pay attention to the correlation data. At the beginning of November, the correlation is 0.69 or 69%. This is a high correlation!
The highest correlation was in mid-October. The correlation of Bitcoin and the SNP500 reached 89%! This is almost a direct copy of the price movements.
📊 WHY DOES BITCOIN START COPYING S&P 500 MOVES?
I discovered this answer for myself several years ago when studying different markets in search of the perfect strategy.
✅ The price of Bitcoin follows the movements of the S&P 500 due to the fact that many institutional traders, whales and funds came from the stock market to the cryptocurrency market. This means that each asset has its own character, but it can change over time depending on the habits of most players.
For example, you have definitely seen such altcoins that grow while 99% of other crypto is falling. The fact is that traders who trade this particular altcoin have a different nature and reasons to push the price. It is the same with falling altcoins in a bull market. Each asset has its own character, but it changes over time, which is what happened with Bitcoin.
🚩If earlier most of the players in the market were short-term traders who wanted to earn 100-200% in a few weeks, then the price grew in pumps and could fall 5-6 times a year by 40%. Now we see that the price grows by 100-200% in one move and begins to consolidate, which was not the case before. This is the influence of new players in the crypto market.
✅ If a few years ago, large funds were afraid to trade on the crypto market because of the risks and low liquidity for buy, then with the spread of blockchain and the growth of capitalization, they can no longer do without investing in crypto and lose such opportunities.
In confirmation of this, we see how the last cycles began to coincide and I probably have to say it, but it will continue. All financial markets are looking at the US economy, so this correlation will continue...but not always.
📊 WILL BITCOIN STOP GROWING AS MUCH AS BEFORE?
✅ Bitcoin will continue to grow by 600-700%. So far, 2 things allow it to grow so much:
1. relatively small capitalization
2. great popularity among traders, especially retailers
🚩 But how much you can earn in such a market depends on your preparation and training provided by professional traders, because they already know all these nuances and can share their experience. I am sure that some chips can increase your profitability by 25-35%.
Traders, was this idea useful for you? If you want to thank or add something, then write your thoughts in the comments!
💻Friends, press the "boost"🚀 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
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