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There's a common theory floating around that crypto is strongly correlated with the U.S. stock market—especially the Nasdaq (NDX). At BlockDB, we decided to dig deeper into the data for 2024 to see if this holds true. Here’s what we found:
(Details in comments 😉)

🔹 BTC vs. ETH: A strong correlation (R² = 0.64) shows that Bitcoin and Ethereum tend to move in tandem, highlighting their close relationship within the crypto space.

🔹 ETH vs. SPX: A weak R² of 0.16 suggests that Ethereum's price movements are not heavily influenced by the S&P 500 index.

🔹 ETH vs. NDX: With an R² of 0.13, Ethereum remains mostly independent from Nasdaq trends, reinforcing its unique market dynamics.

🔹 BTC vs. NDX: Bitcoin's correlation with Nasdaq is even weaker, with an R² of 0.10, proving BTC marches to its own rhythm.

🔹 BTC vs. SPX: Bitcoin shows a slightly stronger connection to the S&P 500 (R² = 0.13), but it's still far from a strong dependency.

🔹 SPX vs. NDX: In contrast, traditional indices like the S&P 500 and Nasdaq have a very strong correlation (R² = 0.90), showing close interdependence in traditional financial markets.

🗝️  Insight:
While traditional stock indices are closely linked, cryptocurrencies like BTC and ETH operate in their own world, showing only weak correlations with major U.S. markets. This independence is partially due to crypto markets operating 24/7, unlike the stock market which closes on weekends and holidays.

What does this mean for investors? 

Cryptocurrencies offer unique diversification opportunities in a portfolio. Stay tuned for more insights like this! 🔍✨

#Crypto #Chart #Analysis #BlockDB