Bitcoin’s Correlation with S&P 500 Suggests Potential Growth
The Essentials in Brief
The Bitcoin market could be closer to its peak than many think, according to an analysis by experts who show a correlation between the S&P 500 Index and Bitcoin cycles. Despite the current consolidation phase, there are signs that may point to a possible price increase. But what is the real future of Bitcoin?
The SPX/Bitcoin Correlation
A crypto analyst named CryptoCon has made a remarkable observation: The peaks of Bitcoin appear to be influenced by the stock market, more specifically by the S&P 500 Index (SPX). According to his analysis, the Bitcoin peak always occurs a few weeks after the SPX has reached its market cycle peak. Particularly interesting is the finding that it takes about 134 weeks until after the last Bitcoin cycle peak the SPX reaches its peak. Based on this correlation, Bitcoin could reach its next cycle peak by the end of July 2024.
Stagnation and Profit-Taking
A recently released report suggests that the Bitcoin network is showing signs of stagnation and long-term holders may be starting to take their profits. This could be a warning sign for the market and suggest that a consolidation phase is imminent or already in full swing.
Bitcoin’s Upside Potential
Despite the possible warning signs, the Market Value to Realized Value (MVRV) Z-Score gives reason for hope. This indicator helps to filter out short-term price movements of Bitcoin and assess its under- or overvaluation compared to the “fair value” from a long-term perspective. Historically, Bitcoin reached its peak when the MVRV Z-Score moved into the pink range (value 7 – 9). Currently, the value of the indicator is slightly above 2, suggesting that there is still much room for a price increase, should the historical trend repeat.
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Bitcoin Compared to Gold
Fred Krueger, another Bitcoin enthusiast and analyst, remains optimistic about the future price of Bitcoin, especially compared to gold and gold ETFs. In his view, Bitcoin could double again, even ignoring capital flows, based on the current market capitalization compared to that of gold.
Our Assessment
The analysis of the correlation between the S&P 500 Index and Bitcoin cycles provides a fascinating perspective on the possible future of Bitcoin. While correlations do not necessarily mean causality, they provide valuable insights into market dynamics. The MVRV Z-Score indicators and comparisons with gold provide additional clues that Bitcoin has not yet reached the end of its growth potential. Despite short-term uncertainties and possible consolidation phases, the long-term outlook for Bitcoin remains positive, provided the historical patterns continue.
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Sources: AMBCrypto, Look Into Bitcoin
| Symbol | BTC |
| Coin type | Alt Coin |
| Transaction Speed | Slow |
| Pros |
|
| Cons |
|
| Price | $101,596.00 |
| 24h % | -2.48 % |
| 7d % | 0.94 % |
| 30d % | 10.38 % |
| 60d % | 48.61 % |
| 1y % | 136.72 % |
| Market Cap | $2,011,936,931,173.00 |
| Max. Supply | 21,000,000.00 |
| Official Links | Website | Whitepaper | Source Code |
| Socials | Reddit | X | Message Board |
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