Bitcoin (BTC) Shows Increased Correlation with U.S. Stocks

Recent analysis from Bitfinex indicates a renewed enthusiasm for high-risk investments.

The report shows that Bitcoin (BTC) is increasingly moving in tandem with U.S. stocks, signaling a return of risk-taking behavior in the crypto market.

Bitfinex attributes the recent BTC rally to a growing correlation with equities and significant short liquidations that have potentially reset the market dynamics.

Notably, $40 million worth of Bitcoin futures and $140 million in other asset pairs were liquidated on August 23, reflecting a drop in market leverage.

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Additionally, Bitcoin’s positive reaction to comments from Federal Reserve Chair Jerome Powell about potential interest rate cuts, which pushed its price to $65,000 earlier this week, highlights the market’s increasing risk appetite.

Despite a decrease in leveraged positions, which may support further price gains, Bitcoin often follows the equity markets with a delay.

The current market conditions suggest that Bitcoin could see a delayed upward trend, in line with the broader risk-on sentiment and diminishing market overhang from seized assets and ongoing distributions.

Alexander Stefanov