Cryptocurrency investors have had their perspective and outlook on Bitcoin drastically changed by its recent price action, with its close correlation to the global markets nullifying its status as a safe haven asset and seeming to confirm that it is a risk-on asset.
This close correlation to the global markets, however, could change at any time, and BTC is already beginning to show some signs of breaking its ties with the benchmark U.S. stock indices.
One top analyst is now noting that right now is “the moment Bitcoiners have been waiting for,” as a break of the cryptocurrency’s connection to the global markets could lead it on a moon mission to $50,000 or higher.
Bitcoin shows signs of breaking correlation to U.S. equities market
At the time of writing, Bitcoin is trading down just under two percent at its current price of $5,200, which is around where it has been trading at for the past couple of days.
Bitcoin is holding up well against the stock market, with all of the benchmark indices collapsing today as the long-term economic implications of the Coronavirus pandemic grow increasingly clear to investors.
The Dow Jones, S&P 500, and Nasdaq are all presently trading down seven percent or more, making a massive decline from yesterday’s rebound, and an extension of the downwards momentum that has been incurred throughout the past several weeks.
Although Bitcoin has been trading in close tandem with these indices over the past several days and weeks, it is important to note that today is one of the first days that the benchmark cryptocurrency has been able to avoid tracking the traditional market’s losses.
Analyst: BTC breaking correlation with traditional markets could send it on a screaming rally
Su Zhu, a prominent analyst and the CEO of Three Arrows Capital, explained in a recent tweet that he believes the risk of sovereign defaults that is currently being priced into the markets seems to suggest that Bitcoin could soon see some upside if it is able to hold steady at its current levels.
“This is in theory the moment Bitcoiners have been waiting for. Several EM mkts are now pricing in significant risk of sovereign defaults. USD itself set on an inflationary course it will be hard to turn back from. If BTC mkt holds these lvls, 50K relatively quickly is possible.”
Assuming that the stock market continues declining in the days and weeks ahead, if Bitcoin is able to stabilize it could instantly confirm the previously held “safe haven” narrative, thus giving it room to rally.
The post Analyst: Bitcoin could see $50,000 “relatively quickly” if it holds current levels; here’s why appeared first on CryptoSlate.
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