The leading digital asset by market volume is unable to move above $10k, but the investors have bullish sentiments for Bitcoin. The short-term correlation with traditions markets and institutional influx are providing a deep insight into why the bullish scenario for Bitcoin is still intact.
On June 15, it had observed that BTC price slumped suddenly when futures in the traditional markets suffered from heavy losses. On this correlation, some analysts have positive opinions claiming that it is positive for Bitcoin, but on the other hand, some are saying that it is ignoring the narrative of BTC as a store of value.
Matt D’Souza, the CEO of Blockware solutions, tweeted recently:
“What is fascinating about BTC are the multiple short-term correlations that emerge. We have witnessed strong, short term correlations to Gold, to USD/CNY, and most recently US Equities. this signals an expanded breadth of market participants owning Bitcoin.”
D’Souza also discussed how this correlation indicates that BTC adds in the portfolios of retail and institutional investors:
“Each correlation indicates a different use case – Digital Gold, Vehicle for Capital Flight, Risk-On Asset (Disruptive Technology). The range of use cases maintain Bitcoin as an overall uncorrelated asset beyond short term intervals – a FEATURE for every portfolio.”
Steadily, the economic condition of the world is coming to normal, and the legacy markets may soon get stable. Crypto analytics firm Glassnode unveils that investors are still able to get profit from Bitcoin. For example, 78.9% of BTC investors manage profit from the leading digital asset.
For retail traders, D’Souza believes that they go for assets that help them in accumulating profit, and it does not matter whether these are digital or traditional equities. He said:
“The way retail/traders operate is once they go underwater they’re overwhelmed and upset so once they hit breakeven they sell and are relieved. This creates what’s called ‘overhead supply’. But if everyone is a winner then they’re holding and enjoying the ride and the asset moves up quicker. So the more winners the better the asset moves higher without people sitting around trying to get out at breakeven and creating selling pressure.”