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Several analytics and data followed bitcoin and S&P 500 for the whole time and came up with the observation for Q1 of this year.
General notion regarding the markets, including the share/stock market and the crypto market, follows that they move almost parallel, somewhat here and there but almost together. However, there were some situations also where both have shown different behavior and patterns, but more or less they follow each other all along.
As for the first quarter of 2022, both the prominent indices S&P 500 and bitcoin, are tied with each other as closely as ever. Closing out of S&P 500 remained 5.5% down for the first quarter while bitcoin (BTC) followed closely and remained down by 2%. Such rates resulted in a correlation tightened of both S&P 500 and BTC at nearly 0.9, where 1 is a perfect correlation while -1 is a perfectly inverted one.
Earlier this week, the flagship cryptocurrency touched approx $48,000 market reaching upto $48,086, which although dropped after that below $45,000 and currently been trading at $43,354 at the time of writing. There has been a cyclic correlation between the S&P 500 index and bitcoin, where the losses of the latter will improve because of the 24/7 nature of digital assets, unlike the stock markets.
Also Read: How is the recent Bitcoin dip related to Stocks falling in China?
The rebounding of digital assets will also be reflected in an improvement in the S&P 500. During the tensions regarding the prolonged war between Russia and Ukraine, traders were having concerned, and there were threats from the Kremlin, Russia, to cut off the natural gas supply of Europe. The conditions were to trade denominated in Rubles.
As previously reported, bitcoin had seen one of the worst starts this year, but later on, till the time it ended up having a growth of around 9% throughout the month, outperforming even US stocks in some instances. However, bitcoin has also been seen to be outperformed by many L-1 layer based tokens like Terra, AVAX, Solana, and Cardano. They have shown gains in double digits regarding the mainstream curiosity about the long-anticipated Ethereum 2.0 launch.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
