Since the beginning of the third quarter, the first cryptocurrency and the S&P 500 stock index have shown a decline of 14% and 3%, respectively. The reason lies in the increase in yields on risk-free US government bonds, writes CoinDesk.
Equity risk premium – the difference between the ratio of the earnings of the S&P 500 components to the sum of their prices and the return UST 10Y — decreased to -0.58, the minimum since 2009. Since 2008, the metric has averaged 3.5 percentage points.
If we consider only the dividend yield, the difference with the yield of ten-year US government bonds has dropped to -2.87, the minimum since July 2007.
In other words, the attractiveness of investing in stocks and other risky assets has faded against the background of the much higher yield of US Treasury securities perceived as a safe haven, the publication explained.
This situation also means there is less incentive to invest in Bitcoin if it is perceived as similar to technology stocks.
Against the backdrop of the stability of the first cryptocurrency, the correlation between Bitcoin and the US dollar dropped to zero, and with leading stock indices it became slightly negative.
Bitcoin’s correlation with the US Dollar Index has hit a remarkable milestone—zero. Interestingly, there is currently almost no correlation with any of the major indicators. As Bitcoin charts its own course, the question arises: is this a bullish or bearish signal?
Explore More… pic.twitter.com/M5IzB6nux6
— IntoTheBlock (@intotheblock) September 21, 2023
According to IntoTheBlock’s Lucas Outumuro, digital gold’s resilience is due to positive expectations for the launch of a spot Bitcoin ETF and the transfer of compensation payments to Mt.Gox clients.
“The trend appears to signal the approach of a bullish cycle. While it is unclear how long this will last in a deteriorating macroeconomic environment, online data shows continued accumulation of coins by hodlers.” – the expert emphasized.
ABMCrypto, with reference to the NVT, aSORP and CDD metrics, noted the lack of bearish activity. The technical picture in the form of RSI, Chaikin Money Flow and MACD indicates the chances of resumption of positive dynamics after some consolidation, journalists added.
Despite the approach Uptober risky assets are weighed down by a potential shutdown due to budget disagreements.
Major October Catalysts (Part 2)
Predictive markets now anticipate a 70% of a Government Shutdown on October 2.
Millions of federal workers face delayed paychecks when the government shuts down, including many of the roughly 2 million military personnel and more than 2 million… pic.twitter.com/XTrt0g06t2
— Joe Carlasare (@JoeCarlasare) September 24, 2023
“Markets are now 70%+ likely to expect a government shutdown on October 2,” — said SmithAmundsen LLC partner Joe Carlasare.
Previously, BitMEX co-founder Arthur Hayes admitted a possible short-term departure of Bitcoin below $20,000 followed by a new bullish impulse. However, in September, he pointed to the positive outlook for digital gold despite politics Fed.
Recall that the founder of Edelman Financial Engines, Rick Edelman, predicted the price of the first cryptocurrency to rise to $150,000 by the summer of 2025.
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