#Bitcoin's Correlation to Nasdaq Increases#
Hot Topic Overview
Overview
Bitcoin's correlation with the Nasdaq 100 has reached its highest level since 2022, with a 30-day correlation coefficient of about 0.70, indicating a high degree of synchronicity in their movements. This heightened correlation is primarily driven by US inflation data, as investors are becoming more sensitive to interest rates. The CPI data due on Wednesday is expected to have a significant impact on the digital token's trajectory. Moreover, the Trump-related momentum could also gain traction in the days leading up to the inauguration, leading to increased market volatility. Hedge activity in the options market is increasing, with investors preparing for potential downside risks, and the proportion of bearish bets is rising.
Ace Hot Topic Analysis
Analysis
Bitcoin's correlation with the Nasdaq 100 index has reached its highest level since 2022, with a 30-day correlation coefficient of approximately 0.70, indicating that their movements are becoming increasingly aligned. This heightened correlation is primarily attributed to investors' heightened sensitivity to US inflation data and anticipations surrounding the upcoming inauguration. K33 Research analysts Vetle Lunde and David Zimmerman highlight that Wednesday's CPI data will have a significant impact on the market, while the Trump-related momentum might further intensify in the days leading up to the inauguration. Moreover, hedging activity in the options market is escalating, suggesting that investors are bracing for increased volatility. The rising proportion of bearish bets reflects investor concerns about potential downside risks. Overall, the strengthening correlation between Bitcoin and the Nasdaq 100 index underscores the significant impact of the stock market's reaction to inflation data on the digital token market. Investors need to closely monitor the associated risks and opportunities.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
The correlation between Bitcoin and the Nasdaq 100 is strengthening, reaching its highest level in two years.
This correlation suggests that the stock market's reaction to US inflation data could influence Bitcoin's price movement.
Investors are preparing for increased volatility and hedging against potential downside risk.
The upcoming US presidential inauguration could have a significant impact on markets, including Bitcoin's price.