The market intelligence platform Santiment believes Bitcoin (BTC) could soon hit $100,000 if the correlation between crypto and stocks decreases.
In a new video update, Brian Quinlivan, Santiment’s director of marketing, says Bitcoin may be diverging from the S&P 500, a historic bullish signal for the crypto king.
“After the bad news about inflation, this could be a sign that crypto is diverging away from equities again and carving their own path. And in most extended bull runs throughout the history of crypto for 15-plus years we have seen that they most often occur when there is little to no correlation with the S&P.
It doesn’t have to be opposite like this, but if they kind of are moving in their own ways – good sign that we can continue forward, hit those $80,000, $90,000, $100,000 levels that many of the bulls out there are mentioning often.”
Santiment noticed the divergence between Bitcoin and equities Wednesday upon the release of fresh inflation data.
“Now looking at the comparison of Bitcoin versus the S&P and even gold, look at this big divergence that just happened [Wednesday]. The CPI report came out, equities got rocked as a result of some fear going on due to inflation being higher than experts were anticipating, but after an initial drop by Bitcoin, which was actually right before the announcement, this was people kind of anticipating that bad news might happen, the bad news was confirmed, but it quickly rebounded and went right back above $70,000 to where it is now at about $70,600.
The S&P is back down to where it was a week ago or so. So this is one of the rare times where we’re seeing a serious divergence. We kind of saw something similar in the opposite direction back in late March when Bitcoin dropped and the S&P stayed level during that time. Lots of reasons for these divergences, but pretty much for the last two years we’ve seen a pretty tight correlation between crypto and equities. So this is very applicable.”
Bitcoin is trading for $70,444 at time of writing, up slightly in the last 24 hours.
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