In a recent analysis, market intelligence firm Santiment has spotlighted an emerging trend that could be pivotal for Bitcoin’s price trajectory: a diminishing correlation with traditional stock markets. According to Santiment’s latest observations, this trend may set the stage for Bitcoin to achieve unprecedented price levels, potentially reaching as high as $100,000.
Santiment is a company well-known in the crypto analytics space. They specialize in providing data-driven tools and insights to help investors and traders navigate the cryptocurrency markets. Their focus revolves around three main data types: raw blockchain data (like transaction volumes and token flows), social media sentiment analysis, and tracking development activity on platforms like Github. Santiment aims to provide users and subscribers with ways to access, visualize, and analyze this diverse range of data. They offer pre-made dashboards, customizable charts, and alerts, all with the goal of helping users make more informed decisions based on a combination of the data insights and their own analysis.
Brian Quinlivan, the marketing director at Santiment, explained in a recent update that Bitcoin appears to be charting a course independent of the stock market’s movements. This trend is significant as past data indicates that Bitcoin thrives during periods when its price movements are not in sync with the broader stock market, according to Quinlivan.
He said that this divergence was particularly evident following the release of the March CPI data, which negatively impacted equities but had a different effect on Bitcoin.
According to the U.S. Bureau of Labor Statistics, in March, the Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.4 percent, matching the increase observed in February. Over the past year, this index has climbed 3.5 percent without seasonal adjustments.
Key drivers of the March increase were the shelter and gasoline indexes, which together accounted for more than half of the rise in the overall index. The energy index saw a 1.1 percent increase during the month, while the food index edged up by 0.1 percent. Notably, food prices at home remained stable, whereas prices for eating out increased by 0.3 percent.
Excluding food and energy, the core CPI also rose by 0.4 percent in March, consistent with its growth in the previous two months. Categories seeing increases included shelter, motor vehicle insurance, medical care, apparel, and personal care. In contrast, prices for used cars and trucks, recreation, and new vehicles declined.
Looking at annual trends, the all-items index has risen by 3.5 percent over the 12 months ending in March, marking a slight acceleration from the 3.2 percent increase recorded in the previous period. The core index, excluding food and energy, went up by 3.8 percent over the same timeframe. Energy prices saw a 2.1 percent rise, marking their first annual increase since February 2023. Food prices have risen by 2.2 percent over the past year.
Quinlivian stated that, after a brief dip, possibly due to market anticipation of the inflation news, Bitcoin quickly rebounded, surpassing the $70,000 mark. This was contrary to the downturn seen in the S&P 500, which reverted to levels seen about a week prior, Quinlivan noted.
This scenario is apparently not isolated. Similar patterns of divergence have been observed at various points over the last two years, despite generally tight correlations between cryptocurrency and equity markets during that time, Quinlivan pointed out. He believes such instances underscore Bitcoin’s potential for independent movement, especially in turbulent economic times.
As of the latest market data, Bitcoin’s price stood at approximately $70,632, essentially flat on the day.
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