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Let's talk correlations: Bitcoin and the Stock MarketCryptohopper Newsletter Chart Bitcoin has lost around 30% of its value since its high on February 13th 2020. At the same time the SP 500 fell over 20% around the same time. So, is there any correlation between the two markets, or is it just coincidence? That is what we will explore in this newsletter! Correlation or coincidence? Throughout 2017 both cryptocurrencies and the stock markets experienced strong growth in an almost unbroken uptrend. The SP 500 grew around 20% from the beginning of the year until the year’s end. Meanwhile Bitcoin had an astonishing growth of over 1,300% in the same year. Although this seems to be a strong sign of a possible correlation between Bitcoin and the Stock market, this is just about where the correlation ends; at least for the time being. Over the course of 2018, Bitcoin was in a steady decline until February 2019. Meanwhile the Stock market has had a small downtrend, an uptrend where it made new highs, then an even stronger downtrend until December 2018. Afterwards, Bitcoin had a strong uptrend from February up until June but it failed to make a new high, then followed an over 50% correction, and then a short uptrend from December 2019 until February 2020. At the same time, the stock market has had an uptrend where it just made higher highs, a range, and then an even stronger uptrend where the price rose by 15% more than the previous high. In the middle of February however, both BTC and the SP 500 started a rapid descent at the same time. Many people suspected this is due to the Corona virus outbreak. To find out whether there really is a correlation or not between the Stock market and cryptos, we have looked at the total number of days in which both BTC and the SP 500 have been in an uptrend or downtrend simultaneously. We have thus found out that 64% of the time Bitcoin and the Stock market are both in an uptrend or in a downtrend simultaneously. This number is dragged higher due to the strong uptrend of both markets during 2017. In 2018 and 2019 there hasn’t been a strong correlation between the two markets. However in 2020, since the outbreak of the Coronavirus, both the stocks and the crypto market have been behaving very similarly. In conclusion it is hard to tell with certainty whether the crypto market and the stock market are correlated, however there are more chances that they are correlated rather than not
COINBASE:BTCUSD
by cryptohopper
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Pinterest is worth your interestPinterest #PINS is a fast-growing company with favorable demographics, the stock has dropped in price while outperforming expectations. Pinterest (PINS) debuted on the public markets less than a year ago at a price of $23.75. Since that time, Pinterest has dropped in price by a great percentage and do not thing for a moment that the coronavirus is to blame 🙂 The interesting part is that Pinterest has actually been profitable and has beaten earnings estimates in the last quarters. So why is it that Pinterest is dropping strongly, why? Because fundamentals are not that important when trading a supply and demand strategy. I’ve happened to read that some analysts are claiming that Pinterest #PINS is a buy for anyone with at least a two-year time horizon. Well, it may be that Pinterest stock will be revalued in two years time, but why buying Pinterest now and lock in part of your capital in a stock that is dropping like a rock reacting to super strong weekly supply zones? It makes no sense how some analysts and web sites are recommending buying Pinterest stock to hold it for two years when the stock is in a clear downtrend. Take a look at Pinterest #PINS supply and demand weekly timeframe analysis. There is a strong weekly supply around $25 per share, these supply zones act like magnets to price, a price level where there are a lot of interest by professional investors.
NYSE:PINSEducation
by AlfonsoMoreno
The Next Great Depression - A Massive Shift Soon I've written at length about how I feel about the stock market. I've talked about how price action closely resembles the years leading up to the Great Depression, and I've also discussed why I think a large crash needs to happen in order for some structural changes to be made. Here are a few of those posts: Where I called a potential blow-off top: Where I talk about why I think a crash is necessary: A crash can happen for any number of reasons. Humanity has grown exponentially in the last 200 years. This causes stresses on our economy, environment, and our species as a whole. When any number of things happen (war, environmental change, viral epidemics, even greed itself), our society's fragility becomes exposed. Right now, it happens to be COVID-19 (the new coronavirus), but it could be anything. Any external variable that puts stress on our infrastructure has the potential to expose the flaws in our hyper-connected, top-heavy world. What do I mean by top-heavy? I mean it in terms of wealth concentration. In the event of disaster, the bottom 90% of the world has very little resources to protect themselves. When you have a top-heavy system built on a shaky foundation...you can guess what would happen. From a technical standpoint, yes, stocks can continue to go up until at least the U.S. Presidential election. Perhaps the DJI can surpass 30K or even 40K, but ultimately I think we'll visit some lows not seen in many years. This can easily be the top here as well, with major indexes unable to invalidate the major bearish divergence on the monthly chart (drawn above). No one can time it perfectly, but I do continue to believe that this current rally is a "seller's rally" or an opportunity for people to take their money and run. I think today's selloff resulted not only from fears of the virus disrupting major supply chains and global economic efficiency, but from the rise of Bernie Sanders. A Bernie presidency would likely send markets reeling, in a period of major economic uncertainty. Regardless of whether or not his policies are a good idea in the long run, I think it could cause some serious upheaval in the short term. I think some stock traders are anticipating a rise in democratic socialism, and trying to front run a deeper market selloff. Once we get a drop (and I do think we're in for a MAJOR stock market selloff), how low we go will really depend on how our governments react to it. It can go far lower than probably most people are expecting, simply from a technical standpoint. The technicals just show the parabolic growth. As I mentioned above, parabolic growth cannot be sustained because of how stress on the system impacts the fragile underlying nature of such growth. What we've seen over the last several decades is not slow, sustained growth. It's not healthy. And I think this will be exposed soon. Looking at the linear chart for the S&P 500, it can drop 50% and still be at the 200 Month Moving Average. That's how overextended this rally is. In conclusion, I think there will be a massive shift in financial markets, the ripple effects of which can last decades. I think it will take this much time for things to get sorted out. Of course, I may be wrong. All I'm doing is speculating, observing, and offering my opinion. This is not financial advice. -Victor Cobra
TVC:SPXShort
by VictorCobra
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