Thread by @bravosresearch

MASSIVE divergence between Bitcoin and stocks

What is happening?

A thread 🧵

2/ Bitcoin’s trajectory typically mirrors that of the US stock market

When the S&P 500 rises, Bitcoin also climbs

Conversely, when the S&P 500 falls, Bitcoin follows suit

3/ Bitcoin is influenced by the same factors as the stock market:

- Liquidity
- Risk-taking
- Investor optimism

4/ That's why in August, when the market dropped 6% in 3 days due to recession fears

Bitcoin also fell around 30% in a short-time

Now, the market has recovered, trading near ATH’s

But, Bitcoin still remains significantly below its highs

5/ We've discussed that the recent recession fears are likely temporary and the market's recovery was justified

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6/ However, some argue that the rally is driven by a few companies, like Nvidia and Apple

Which masks the actual strength of the market

So, instead of looking at the S&P 500

Let’s consider RSP → an equal-weighted version of the S&P 500

7/ RSP recently:

- Broke above a downtrend line dating back to April
- Reached a new all-time high
- Has been consistently above key MA’s

This healthy structure indicates potential for further gains

8/ If the RSP moves higher, Bitcoin is likely to follow

Right now, there's a noticeable gap between Bitcoin and RSP

But this divergence could be similar to early 2024 when Bitcoin eventually caught up

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11/ Thanks for reading!

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