Despite its largest asset, Bitcoin (BTC) trading back above $20,000, thecryptocurrency marketis still struggling, and its similarities and correlation with theequities market have often been used to draw some important lessons from the past.
One of them is the fact thatbear marketrallies, or periods when assets increase in value briefly during a broader period of decline, can be very enticing, as the senior research analyst at crypto market intelligence platformMessariTom Dunleavysaidon October 5.
Posting the charts of the past S&P 500 bear market rallies for reference, Dunleavy explained the appeal of such periods – one of which he says we’re in at the moment – especially considering the historical data that shows them “often exceeding 20% in short bursts.”
Correlation and comparisons with crypto market
Notably, thecorrelation between crypto and S&P 500has often been at the center of attention offinancialexperts. For instance, Mark Mobius, the founder of asset management firm Mobius Capital Partners, has voiced his view that Bitcoin’s decline is bad for the S&P 500, explaining that whenBitcoin goes down, so does the S&P 500.
More recently, in September,crypto traderand analyst Josh Rager used the S&P 500 Index equities movement chart as a reference to indicate that thingsweren’t “looking so good right now” for Bitcoin, asFinboldreported.
That said, the on-chain and social metrics platformSantimentrecently stated that easing of the correlation between crypto and equities, along with the support of the S&P 500 being down -2.4%, was a good sign for crypto as analysts were expectingsome Bitcoin momentum.
On top of that, data comparing the 10-year growth of both S&P 500 and Bitcoin has shown that the average prices of the S&P 500 have increased four times, whereas Bitcoin’s advanced as much as 1,000 during the same period, suggestingBitcoin was a better investment.
