Kraken says that Bitcoin and the traditional markets are decoupling.
In a report by the major US crypto exchange Kraken listed these signs that the correlation between Bitcoin Revolution the greenback and traditional markets continues to decline.
The Kraken report on volatility in September stated that Bitcoin (BTC) had largely had a negative correlation with the US Dollar Index (DXY) since May. The two markets only touched briefly in September.
30-day correlation Bitcoin/US Dollar Index: Octopus
The report attributes BTC’s dollar divergence, in addition to declining growth rates, to the Federal Reserve’s plan to keep interest rates at zero percent until at least 2023. Meanwhile, Bitcoin has shown a positive correlation with the euro since May.
The report states that although the correlation between the BTC and the S&P 500 had reached an 8-month low at the beginning of the month, it was still too low for the S&P 500. However, the correlation later increased again as both markets consolidated.
Bitcoin’s correlation with gold has remained positive since mid-July. Both markets have been under downward pressure in recent weeks.
30-day correlation of Bitcoin with gold: Octopus
Kraken expects Bitcoin to perform better in October than in September. This would be in line with the behavior in eight out of nine years.
The report predicts that BTC will grow by 11 percent in October. This would leave BTC at $11,850 at the end of the month. This is 3 percent more than the current level. Kraken explained that Bitcoin had fallen below its monthly average in six out of nine months in 2020.
Kraken’s mild optimism is shared by two respected analysts, and even outperformed by far. Former hedge fund manager Raoul Pal has recently stated that he expects massive institutional acceptance and has shifted more than half of his personal investment portfolio to Bitcoin:
Alex Saunders of Nugget’s News compared the current situation with that of mid-2017 and predicted that institutional demand for Bitcoin would probably trigger a „breathtaking rally“: