Ecoinometrics - Bitcoin might be asleep, but the key correlations are still in place: here is a 5 minutes overview of the situation
Bitcoin correlations report, August 2023
Bitcoin is on autopilot and the destination is nowhere. At least that’s what it feels like if you look at BTC in isolation. But if you compare Bitcoin’s price action to the rest of the market the same factors are at everywhere. Let’s look at what the data says.
The Ecoinometrics newsletter gives you insights from crypto and macro data to help you make better investment decisions.
We spend hours every day gathering data, creating metrics and bringing them to life with data visualizations that allow you to quickly get to the heart of things.
We then distill all that knowledge in each issue of the newsletter with less words and more charts so that you get insights, direct to the point, in five minutes or less.
Join more than 20,000 investors here:
Done? Thanks! That’s great! Now let’s dive in.
P.S. Checkout our latest tracker of MicroStrategy Bitcoin holdings at https://www.ecoinometrics.com/microstrategy-bitcoin-holdings-with-charts/.
Bitcoin correlations report, August 2023
Every month in the Bitcoin’s correlation report we examine a set of correlations and trend similarity metrics to understand what is driving Bitcoin’s price action and what you need to pay attention to. This is our report for August 2023.
The takeaway
Since the beginning of July Bitcoin’s price action has been dead.
But that doesn’t mean BTC is drifting alone in an indifferent universe. Looking at it through the lens of correlations the key aspects of the macro plays are intact. Let’s break these down.
The macro drivers:
Over short time frames (correlation score in the table) Bitcoin is running its own playbook. Stocks, gold, US$ strength, bonds, none of these affect the day-to-day moves of BTC.
But when you zoom out and focus on the long term trends (trend similarity score in the table) you can see that there is a single macro trend largely driven by the US$ strength.
The Bitcoin followers:
MicroStrategy and the miners stocks are your go to options for tracking BTC.
Coinbase is making a comeback but the regulatory uncertainty in the US isn’t encouraging.
Bitcoin vs Ethereum:
Despite the SEC being in an all out war against alt coins Ethereum isn’t shaking out its incredible strong correlation to Bitcoin.
The table below summarizes the data over the past 90-days.
Now let’s dig into each category.
Dead summer
Keep reading with a 7-day free trial
Subscribe to Ecoinometrics to keep reading this post and get 7 days of free access to the full post archives.