Related Topics

Bitcoin vs. Stocks, Gold et al: Any Correlations You Can Hang Your Hat on?

by Tony Carrion
Updated: April 16, 2020

Hi, this is Tony Carrion. Not surprisingly, in the wake of the Coronavirus pandemic, the financial news has been drawing relationships between the price action in stocks, gold and Bitcoin as these headlines show.

While certainly there can be reactions to headlines, RN Elliott established years ago that news doesn't drive market prices, but that market prices adhere to the Wave Principle. To take a look at possible correlations between Bitcoin and other asset classes we made up this correlation matrix. Looking at historical correlations from when Bitcoin started trading 10 years ago as well as three year and one year timeframes. As the matrix suggests, the correlations haven't always been consistent. While there have tended to be positive correlations between the U.S stocks as represented by the S&P 500. Other than on a historical basis, the U.S dollar and yields on 10 year treasury notes have tended to be negatively correlated to Bitcoin. Gold and Bitcoin have tended to show some positive correlations as we move into the one year and three year timeframes. One reason for the positive correlations is that Bitcoin and stocks are considered risk assets, whereas the dollar and treasuries are considered safe havens. Gold wears a dual hat where on the one hand, it's considered a store of value and on the other and instrument of speculation. But other than some positive correlations, it would be risky to base investment or trading decisions just based on correlations alone.

Although Bitcoin and the S&P 500 have made highs and lows proximate to each other, particularly during the most recent time period. One big difference is that Bitcoin underwent an 82% bear market, whereas U.S stocks are just beginning a new bear market. Looking at Bitcoin and gold, while there have been similar headline triggered reactions recently, the patterns are clearly distinct from one another. And one would be taking unnecessary risk in basing a trading strategy just considering positive correlations alone. Which as we've seen can vary from one time frame to the next. Thanks for watching.

Bitcoin will go where trader psychology takes it.

Get there first with Elliott waves.

Intermarket correlations work... until they don't.

To know what's next for Bitcoin and the gang, you must research them individually.

That's what our Cryptocurrency Pro Service does for you every day.

Bitcoin, Ethereum, Litecoin -- and now also 4 newcomers: Bitcoin Cash, XRP, EOS and Monero -- you get end-of-day Elliott wave forecasts for longer-term opportunities.

Plus, you get intraday coverage for faster-moving waves, 24 hours a day.

Cryptocurrency Pro Service is the most comprehensive Elliott wave forecasting service anywhere. Try it -- here's how.

4 ways Crypto Pro Service lets you trade with more confidence

If it's an important crypto, you'll be on top of it

1. You Get Analysis Throughout the Day

Your Crypto Pro Service subscription puts a team of crypto experts in your corner. Their goal is to make sure that day-by-day, hour-by-hour, you have the very latest Elliott wave counts and projections. We provide you with crypto forecasts several times a day so you can get in front of intraday moves -- as well as longer-term opportunities -- for these markets:

Bitcoin, Ethereum, Litecoin, XRP, Cardano, Polkadot, Solana and Binance Coin

2. You Get "Opportunity-Now!" Alerts

Your Pro Services team scours the crypto markets for dramatic set ups. Each is a market that has reached a low-risk, high-potential reward juncture in its wave pattern. You'll find them in the Opportunities section of your Pro Service portal.

3. You Get Essential Weekly Perspective

Once a week, your crypto analysts record a video to help you prepare for the week ahead. Sit back and watch as our analysts reveal the markets that are on their radar and that should be on yours. These videos add up to unparalleled, essential planning perspective for all serious crypto followers.

4. You Become Part of an Exclusive Community of Savvy Elliott Wave Traders

Our Crypto team is your Crypto team. If you have a question about the Wave Principle or our analysis, just send us an email. We'll update the next post or video so you and your fellow subscribers get the clarity you need. Or, if you're having a hard time grasping an Elliott wave concept, often we can suggest a resource for you to read or watch. We know we're successful when you understand the Wave Principle and our analysis. We'll do what we can to make sure that happens.

Note that we do not provide individualized services, assistance or advice concerning investing or trading in any way.


Get Both Intraday and Daily Coverage

Get intraday and daily forecasts for 8 digital coins: Bitcoin, Ethereum, Litecoin, XRP, Cardano, Polkadot, Solana and Binance Coin.

$534 $404/mo.