, 2022-12-05 10:34:16,
- Bitcoin cannot escape its correlation from traditional markets
- Short-term sentiment was caught in between declining optimism and increasing gloom
Bitcoin [BTC] has had an affinity with monetary policy since the advent of the new market cycle, according to Quantum Economics expert and on-chain analyst Jan Wüstenfeld. In his 4 December CryptoQuant publication, Wüstenfeld opined that BTC’s negative sentiment, accompanied by declining economic prospects, was no random occurrence.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
According to him, BTC and the traditional market were not aligned before the current bear market. However, the fact more institutions were now involved with the coin meant that it was inevitable to escape the correlation. At the same time, the federal funds rate hike also played its part.
It’s no more in retail control
The analyst also opined that the market was subsequently liberated from sole retail investors’ control. While justifying his viewpoint, Wüstenfeld said,
“We have seen more widespread adoption of Bitcoin over the last years. Futures markets being introduced, institutional interest rising etc. So naturally, Bitcoin has become more connected to the traditional financial markets and is not only driven by retail investing anymore.”
Of course, Bitcoin had correlated with the stock market at some point. In fact, the king coin had, in some cases, reacted to the US inflation reports as…
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