Bitcoin has risen 6% over the last 24 hours, and more than 18% in the week since it rallied higher amid a selloff in the stock markets.
Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, says Bitcoin’s big move has seen the benchmark crypto “decouple” from the stock market.
In a note on Tuesday, Sotiriou said that BTC’s “incredible” gains this week are a signal that the market could be looking at a potential decoupling from stocks. This is, he says, likely to be the outlook in short-term.
Indeed, the stock market is heading for another negative close on Tuesday with losses exceeding 1.5%.
Bitcoin: Why is it so hot today?
Commenting on the recent correlation between Bitcoin and stocks, the GlobalBlock strategist said that this had been the case “for months.” However, the cryptocurrency is signaling what could be an uncorrelated breakout, albeit possibly a short-term one.
Sotiriou also explained why Bitcoin rallies as the S&P 500 drops:
“Bitcoin is being heavily bid due in part to the narrative of being a permissionless and censorship-resistant way of transferring value, as it has been used during the crisis in Ukraine as well as political unrest in Canada.”
But it’s not just stocks that BTC is outshining this week. BTC’s flagship crypto is outperforming the gold. Last week, Bitcoin crashed alongside stocks. Today, despite rallying to highs of $1,945 with over 2% in gains, gold trails BTC’s 6% upside.
“It is [also] fascinating that, after a week into geopolitical uncertainty, Bitcoin is outperforming gold, which is known as a safe-haven asset,” Sotiriou noted.
Bitcoin: Can it go higher?
Real Vision CEO Raoul Pal thinks it can, pointing to the current crypto market outlook that “feels a lot like March 2020.”
“Back then we threw the worse possible news at it (a pandemic and a global shut down) and it fell very sharply but failed to make a new low,” he tweetedBitcoin reached $44,000
Pal sees a similar macro picture given the current situation with the Ukraine war and higher rates. Also, Pal believes that oil prices have risen to $105 per barrel. While the 2022 environment is a different time, he thinks Bitcoin’s failure to make a new low suggests “macro might get more positive for crypto.”
He also warns against overconfidence notingA new crypto crash could be triggered by the end of tech selling.