Bitcoin has been seen as many things over the past decade… Perhaps most often it’s been likened to ‘digital gold’ — a safe haven asset and known as a way to store value for periods of increased uncertainty. 

But if you look at the price action from the past year, you’d have trouble drawing that conclusion… 

Below is a chart that shows the correlation between bitcoin daily return percentages and the broader stock market’s daily return percentages: 

When you see it plotted out like this, it’s easy to see that bitcoin has been moving more and more in line with stocks. Although bitcoin tends to have more volatile moves in one way or the other, it generally appears that when stocks go up, bitcoin goes up, and vice versa.

Ironically enough, as I write this bitcoin is actually down a little while the broader stock market rallies. But just like stocks, bitcoin has suffered a tough multi-week string of losses. In fact, right now bitcoin is headed for its longest streak of weekly losses ever. 

Does that mean that bitcoin is finished, along with other cryptocurrencies? Certainly not! 

This recent price action is tough, but the ground hasn’t fallen out from beneath bitcoin just yet. Currently, bitcoin is stuck under some heavy resistance at $30,000 so we’ll need to see a move above that important technical and psychological level for anything substantial to shape up. 

Fortunately, the broader market is up today. If we can get a nice rally to break the 7-week losing streak that we’ve seen in the market, maybe bitcoin will catch a break too.

To a bright future,

Ray Blanco
Chief Technology Expert, Technology Profits Daily
AskRay@StPaulResearch.com