Couple Correlations

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It took me so long to do Part One and Part Two of my “bad predictions” post, I was just going to call it a day until tomorrow, but I’m prone to self-guilt, so here I am again with a new, quick post (while simultaneously working on an entirely new project for my Diamond members).

As I’m sitting here this evening, the markets are (of course) pushing to new lifetime highs. Since cryptos have been on an absolute tear lately, I was curious how Bitcoin correlated with equities. Here, below, is the SPY with its correlation to $BTC beneath. As you can see, right now they’re about as correlated as they can be, with equities and cryptos cheerfully lurching up together. The curious thing is how the correlation is a relatively smooth sine wave, suggestion that these two are going to part ways again and work their way toward being inversely correlated.

slopechart SPY

Gold, as we all know, has been the odd-man-out since August 6th. Gold is presently inversely correlated to $BTC, even though the two instruments, it could be argued, have quite a few traits in common. These days, cryptos are leaving precious metals in the dust.

slopechart GLD

Looking at Bitcoin all by itself, it had its highest closing price in history on Tuesday (although, on an intraday basis, it hasn’t quite beat its December 2017 record). My hunch is that it’ll handily beat this record, but it sure would be a lot more appealing if it eased back……….a lot. Going up 100% in just six weeks is a bit much to swallow.

slopechart BTC