Stock market experiences enormous increase: Bullish for Bitcoin – or does it stay behind?
Following the positive news about the vaccine and the fact that a winner was finally announced in the U.S. presidential election, major U.S. stock indices such as the S&P 500 and the Dow Jones Industrial Average have set a new all-time high.
Could Bitcoin continue to rise due to its ongoing correlation with the stock market and finally reach a new high after three years of bear market?
S&P 500, Dow Jones reaches new all-time high with vaccine news
The price increase with Bitcoin in the past week was one of the bullishesten for years and brought the prominent crypto currency after market capitalization on scarcely under 16.000 US Dollar. The long-awaited „decoupling“ of the crypto currency and the stock market also arrived according to analysts, which explains the earlier weakness of the stock market compared with Bitcoin.
But with a winner in the U.S. election, the stock markets followed instead, rising to new all-time highs.
The S&P 500 rises to new all-time highs after positive news about vaccines became known
The S&P 500 set a new record, and the Dow Jones Industrial Average, which has only reached lower highs since Black Thursday, finally reached a new high for 2020.
The movement in the stock market is unexpected, as most analysts have concluded that a collapse is imminent. Several signs that the stock market has peaked have been completely ignored, and the markets appear to be completely irrational in the face of economic disaster.
And if instead stocks are bullish with a Biden victory – a combination that was also not expected – could this also push Bitcoin to a new all-time high in 2020?
2020: the year Bitcoin finally cracks $20,000?
Bitcoin was less than $4,000 away from setting a new all-time high last week. The ongoing rally has sparked a discussion about decoupling crypto assets from the stock market, but a surprising rally in stocks could keep the correlation going for some time.
Although it did indeed look as if Bitcoin would decouple from the stock market, today’s price movement and rally in the major U.S. stock indices, such as the S&P 500 and the Dow Jones, suggest that they could follow the crypto-currency market as they have in the past.
Was this the decoupling of Bitcoin, or are stocks beginning to follow what has become a leading indicator?
It is not clear why such a thing exists, but perhaps the constantly active crypto-market makes a change of mood among investors more susceptible and therefore appears before the rest of the financial market.
It is not the first time that Bitcoin is considered a leading indicator for the stock market. But the correlation is not only negative.
The recovery of the stock market has helped Bitcoin to continue to climb – and this recent surge to all-time highs could also be happening for Bitcoin.
Thus the crypto currency could finally test its previous high of $20,000 again.