Underpriced all the way down: a pattern in Bitcoin’s correlations

Bitcoin correlations report, May 2024

If you are an optimist (I am) there are a lot of things to like in this market setup. 

It goes like that:

• The NASDAQ 100 is on the rise.

• Bitcoin is chasing the NASDAQ 100.

• The miners are chasing Bitcoin.

• Ethereum is chasing Bitcoin.

That means in terms of correlations, betting on mean reversion right now is good timing.

Let's see what we are talking about with a few charts.

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P.S. we have just released a new dashboard on the Bitcoin miners. The purpose of this dashboard is to track if the Bitcoin miners stocks are over priced or under priced relative to Bitcoin. Paid subscribers can check it out here. 

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Underpriced all the way down: a pattern in Bitcoin’s correlations

The takeaway

The pattern of price correlations indicates that relative to leading assets Bitcoin, Ethereum and the miners are underpriced.

At the same time the NASDAQ is pushing to record highs and Bitcoin looks ripe for a breakout. 

So if you think macro will turn out favourable to risk assets in the coming months then now is a good time to take long positions.

Bitcoin is chasing after the NASDAQ