{"id":19596,"date":"2022-04-08T07:30:15","date_gmt":"2022-04-08T11:30:15","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=19596"},"modified":"2022-04-08T07:30:15","modified_gmt":"2022-04-08T11:30:15","slug":"bitcoin-has-been-breaking-its-promise","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/bitcoin-has-been-breaking-its-promise\/","title":{"rendered":"Bitcoin Has Been Breaking Its Promise"},"content":{"rendered":"

Bitcoin was created to defy the market…<\/p>\n

An asset that was created to be devoid of influence from the Fed, the government, and general market sentiment….<\/p>\n

And at its best… this has been true.<\/p>\n

For instance, in 2017, leading up to the introduction of the first bitcoin futures product, it rose 366% in three months.<\/p>\n

Or in 2019, after the “crypto winter” the year before, it rose 232% in the first six months.<\/p>\n

The biggest example was bitcoin’s 700% rise coming out of the lows of the pandemic… when it reached $40,000 for the first time.<\/p>\n

All of these gains in bitcoin happened when its correlation to the overall market was falling, <\/em>and it was dancing to its own beat.<\/p>\n

Even though bitcoin has recently bounced 30% from its lows this year, it has done so completely in sync with the market. So, its correlation to the market has been high.<\/p>\n

Take a look at this chart…<\/p>\n

\"Chart\"<\/div>\n

The black solid line is bitcoin’s correlation to the S&P 500 with bitcoin’s price overlaid in the background.<\/p>\n

The three examples we pointed out above all came when correlation with the market was falling…<\/p>\n

Right now, that correlation is at its highest. This is probably due to institutional influence from the hedge funds and banks that got in on it… diluting bitcoin’s unique qualities.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Investors who are interested in timing those big 200%+ gains in bitcoin want to see the price moving up without <\/em>help from the market… an even better scenario would be bitcoin rising with the market falling.<\/p>\n

For bitcoin to do that, it needs a new bullish<\/a> narrative. Right now, it just doesn’t have the hype to push it through the labyrinth of market fluctuations.<\/p>\n

That’s a problem for bitcoin, because when it trades with the market it becomes the market<\/em> on steroids.<\/p>\n

Which is why you may have noticed that the end of the relief rally in the market – a rally I called would come to an abrupt end on March 29<\/a> – saw bitcoin drop 10%.<\/p>\n

And correlations staying high also means that a deeper pullback in the market will result in an even deeper pullback in bitcoin.<\/p>\n

Without a new narrative specific to bitcoin – one that’ll unchain its price from all the algorithms and trader influence at some technical level or other – the trajectory of its returns will continue to resemble that of the market.<\/p>\n

Investors looking for the large types of gains in bitcoin I mentioned earlier should be asking themselves one thing…<\/p>\n

Right now, what makes bitcoin different than the market at large?<\/p>\n

Regards,<\/p>\n

Eric Shamilov
Analyst, Market Minute <\/em><\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

How do you think bitcoin can go back to generating big gains without market influence?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

When are the 100%+ gains coming?<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[13],"newsletter-type":[],"ticker":[],"class_list":["post-19596","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-eric-shamilov"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=19596"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/19596\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=19596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=19596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=19596"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=19596"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=19596"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=19596"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=19596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}