BTC will keep going up

BTC has always had a high correlation with the Nasdaq 100 index, but after March of this year, this correlation is gradually weakening. What is the situation?

Below is a comparison of the graphs of BTC and the Nasdaq 100 index. It can be seen that they were highly correlated before March 2023. The low correlation from November 2022 to January 2023 was due to the impact of the FTX incident, which caused BTC to enter a corrective oscillation. After March 2023, the correlation between the two gradually decreased, which has confused many people.

Screenshot 2023-07-20 113718

What's going on? Please refer to the following chart:


When compressing the price curve of BTC from March to July 2023, it seems that BTC and the Nasdaq 100 index still show a high correlation, but their cycles are not synchronized.

The BTC market has always been fueled by the overflow of funds from the rise of US stocks. Under the high-intensity tightening policy of the FED last year, funds have been continuously withdrawn from BTC, and this phenomenon has continued until now.

Screenshot 2023-07-20 133826

After experiencing a long decline and oscillation in 2022, both US stocks and BTC saw a change in trend in January 2023 and rose in sync. However, the synchronization between the two gradually weakened after March. Analyzing the reasons:

  1. Traditional capital may still not have fully recovered from the series of explosive events in the cryptocurrency circle in 2022.
  2. Currently, we are still in a tightening cycle, and funds are more inclined towards mature markets like US stocks.
  3. The rise of US stocks has not yet reached the point of fund overflow, while the rise of BTC requires incremental funds to drive it.
    Therefore, the current rise of BTC lacks fuel, but because the trend is there, the cycle has been extended.
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