Bitcoin is trading for $20,620 at the time of writing, a 3.22% increase in the past 24 hours and the world's second largest cryptocurrency Ethereum increased by 9.48%, trading for $1,201.
On Wednesday after US consumer price index data was released, we saw volatility in the cryptocurrency market. On one side, bitcoin and cryptocurrency market is trying to recover and on the other side U.S. stocks were hit hard on Thursday as investors worry about the Federal Reserve continuing to hike interest rates after the CPI data was released. Traders are expecting the Federal Reserve could raise its target fed funds rate by 1 percentage point at its July 26-27 meeting. And if this happens, we could see more volatility in Cryptocurrency and stock market in coming weeks.
Bitcoin’s correlation with stocks is close to its lowest point of 2022. From the past few months cryptocurrency and stock markets both remain bearish. The 40-day correlation between the bitcoin and the Nasdaq 100 index is now below 0.50, according to Bloomberg data. Bitcoin's 30-day correlation to tech stocks are in downward movement after seeing record high correlation just before the crash of May 2022.
The correlation between world's largest cryptocurrency and stocks is still positive, which shows that bitcoin and tech stocks can still move in the same directions. But if in the future this correlation continues to go down, it might be considered as a signal that the cryptocurrency market has seen the bottom and it may bounce in coming months.
Disclaimer & Suggestion : Please always do your due diligence before investing in any cryptocurrency or project. This must not be treated as financial advice.