#Bitcoin Correlation to Nasdaq Increases#

Bitcoin's correlation with the Nasdaq 100 index has reached its highest level since 2022, with a 30-day correlation coefficient of around 0.70, indicating a growing synchronicity between the two. This heightened correlation suggests that the stock market's reaction to US inflation data could have a significant impact on the digital token. Analysts point out that Wednesday's Consumer Price Index (CPI) data will be particularly important due to increased sensitivity to interest rates in recent times. Moreover, Trump-related momentum could further intensify in the days leading up to his inauguration. Hedge activity in the options market is also increasing, suggesting investors are preparing for heightened volatility, with the proportion of bearish bets rising as investors hedge against potential downside risks. In conclusion, the strengthening correlation between Bitcoin and the Nasdaq indicates an increased sensitivity of the digital currency market to macroeconomic factors, requiring investors to closely monitor inflation data and political developments.