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Bitcoin weekly correlation with Nasdaq hits 2-year low

Bitcoin weekly correlation with Nasdaq hits 2-year low

As Bitcoin (BTC) takes a little break from its previous gains, the relationship between the largest cryptocurrency by market capitalization and the stock market is often a matter of interest among analysts, and recently this correlation has hit a record low for more than two years.

Specifically, the weekly correlation of the maiden crypto asset to the Nasdaq index has dropped to -0.39, its lowest point since August 2021, or 26 months, as observed by the co-founder of crypto market analytics platform Reflexivity Research, Will Clemente, in an X post published on October 30.

Bitcoin’s correlation with stocks since early 2021. Source: Will Clemente

Meanwhile, stocks have experienced a massive turn for the worse in recent weeks, shedding a significant portion of their gains due to increased macroeconomic challenges, whereas Bitcoin witnessed a major rally that managed to flip the market capitalization of electric vehicle manufacturer Tesla (NASDAQ: TSLA).

At the same time, the financial expert and CEO of crypto trading platform CoinRoutes, Dave Weisberger, has pointed out that the macroeconomic outlook for Bitcoin, as well as for gold, was “as overwhelmingly positive as it could possibly be,” taking into account geopolitical uncertainties, as Finbold reported earlier.

Bitcoin price analysis

At press time, Bitcoin was trading at the price of $34,404, which indicates a decline of 0.95% on the day and a 0.42% loss across the previous week, but it is still holding onto the monthly gains of 26.53%, according to the latest data on October 31.

Bitcoin 30-day price chart. Source: Finbold

Indeed, the flagship decentralized finance (DeFi) asset previously had the tendency to move in the same direction as the Nasdaq index, which has led some financial experts to use it as an argument against Bitcoin’s role as a diversifier. However, the recent decorrelation of -0.39 might prove them wrong.

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