12-26-2022, 11:02 PM
[SERIOUS] Bitcoin followed the stock market all year, even during the Luna collapse.
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/zvpamp/serious_bitcoin_followed_the_stock_market_all/"> <img src="https://a.thumbs.redditmedia.com/5J579PqxcZ65IBcZrC4dbhCTnAEBSCyUEWQ8Vxd0G70.jpg" alt="[SERIOUS] Bitcoin followed the stock market all year, even during the Luna collapse. But there was one exception: the collapse of FTX" title="[SERIOUS] Bitcoin followed the stock market all year, even during the Luna collapse. But there was one exception: the collapse of FTX" /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>In this post I will compare <strong>Bitcoin (BTC)</strong> and the stock market to see where price behavior shows similarities and differences during 2022. This is relevant because it provides information on whether BTC is just 'another version' of the stock market during this year or not. I will use the <strong>Dow Jones Industrial Average (DJI)</strong> as as a proxy for the stock market. Te DJI is <em>"a price-weighted index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the Nasdaq. The index was created by Charles Dow in 1896 to serve as a proxy for the broader U.S. economy."</em></p> <p>​</p> <p>Please see the comparison of the BTC (top chart) and the DJI (bottom chart) in the two charts below, both displayed on the weekly timeframe. A brief summary of both assets across the year:</p> <ol> <li>Since January, both BTC and DJI started moving down.</li> <li>BTC and the DJI bounced and made a local high in late March/early April.</li> <li>After the local high, both assets moved down and capitulated hard to make a new low around June 22 (<em>dashed purple vertical line 1</em>).</li> <li>After June, there was a bounce again, with another local high in the middle of August.</li> <li>Then both assets started dumping. The DJI barely made a new low while BTC did not make a new low around 10 October (<em>dashed purple vertical line 2</em>).</li> <li>The period of interest starts, highlighted with a <em>blue rectangle</em>.</li> </ol> <p><a href="https://preview.redd.it/c116wup0a98a1.png?width=1813&format=png&auto=webp&s=80a998b7ac9ec9fe2a5d6ceafafc4cb7494a0ecf">Bitcoin weekly</a></p> <p><a href="https://preview.redd.it/ahua4pwj698a1.jpg?width=1819&format=pjpg&auto=webp&s=c6b78ff0d68b3c3dd5d15642185c1684f23b237a">Dow Jones weekly</a></p> <p><strong>Main conclusions:</strong></p> <ol> <li><strong>Both BTC and the DJI showed a very similar pattern all year.</strong> BTC basically followed the DJI all year. Major moves happened on the same week or within a week from each other.</li> <li><strong>The DJI even showed the exact same pattern as BTC during the period of the collapse of Luna and Three Arrows Capital (3AC) early May into June</strong>. We all believe that BTC dropped due to the collapse of Luna and 3AC, but there is no major deviation here relative to the DJI in terms of price action, except <em>after</em> the capitulation (period in-between the two purple dashed lines), the DJI did bounce harder. See the picture below from a video of BCB for a clearer comparison of that period.</li> <li><strong>There was one instance of heavy decoupling between BTC and the DJI, when FTX collapsed</strong> (blue rectangle in pictures above, starting early November). The DJI moved up a lot while BTC dropped and made a new low. Not the version of the decoupling we had hoped for. </li> </ol> <p>The question is now, if the DJI dumps more, does BTC follow? Or can we decouple the right way? And would we have bounced hard without FTX?</p> <p><a href="https://preview.redd.it/c8kmjljtc98a1.png?width=1551&format=png&auto=webp&s=22d3bbe3e77c76db2990e8f631b7212ea860e7dc">Conclusion 2: Bitcoin chart with Dow Jones Index overlaid in blue line. Arrow is the time of the Luna/3AC collapse [thanks BCB!]</a></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Beyonderr"> /u/Beyonderr </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/zvpamp/serious_bitcoin_followed_the_stock_market_all/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/zvpamp/serious_bitcoin_followed_the_stock_market_all/">[comments]</a></span> </td></tr></table>
<table> <tr><td> <a href="https://www.reddit.com/r/CryptoCurrency/comments/zvpamp/serious_bitcoin_followed_the_stock_market_all/"> <img src="https://a.thumbs.redditmedia.com/5J579PqxcZ65IBcZrC4dbhCTnAEBSCyUEWQ8Vxd0G70.jpg" alt="[SERIOUS] Bitcoin followed the stock market all year, even during the Luna collapse. But there was one exception: the collapse of FTX" title="[SERIOUS] Bitcoin followed the stock market all year, even during the Luna collapse. But there was one exception: the collapse of FTX" /> </a> </td><td> <!-- SC_OFF --><div class="md"><p>In this post I will compare <strong>Bitcoin (BTC)</strong> and the stock market to see where price behavior shows similarities and differences during 2022. This is relevant because it provides information on whether BTC is just 'another version' of the stock market during this year or not. I will use the <strong>Dow Jones Industrial Average (DJI)</strong> as as a proxy for the stock market. Te DJI is <em>"a price-weighted index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the Nasdaq. The index was created by Charles Dow in 1896 to serve as a proxy for the broader U.S. economy."</em></p> <p>​</p> <p>Please see the comparison of the BTC (top chart) and the DJI (bottom chart) in the two charts below, both displayed on the weekly timeframe. A brief summary of both assets across the year:</p> <ol> <li>Since January, both BTC and DJI started moving down.</li> <li>BTC and the DJI bounced and made a local high in late March/early April.</li> <li>After the local high, both assets moved down and capitulated hard to make a new low around June 22 (<em>dashed purple vertical line 1</em>).</li> <li>After June, there was a bounce again, with another local high in the middle of August.</li> <li>Then both assets started dumping. The DJI barely made a new low while BTC did not make a new low around 10 October (<em>dashed purple vertical line 2</em>).</li> <li>The period of interest starts, highlighted with a <em>blue rectangle</em>.</li> </ol> <p><a href="https://preview.redd.it/c116wup0a98a1.png?width=1813&format=png&auto=webp&s=80a998b7ac9ec9fe2a5d6ceafafc4cb7494a0ecf">Bitcoin weekly</a></p> <p><a href="https://preview.redd.it/ahua4pwj698a1.jpg?width=1819&format=pjpg&auto=webp&s=c6b78ff0d68b3c3dd5d15642185c1684f23b237a">Dow Jones weekly</a></p> <p><strong>Main conclusions:</strong></p> <ol> <li><strong>Both BTC and the DJI showed a very similar pattern all year.</strong> BTC basically followed the DJI all year. Major moves happened on the same week or within a week from each other.</li> <li><strong>The DJI even showed the exact same pattern as BTC during the period of the collapse of Luna and Three Arrows Capital (3AC) early May into June</strong>. We all believe that BTC dropped due to the collapse of Luna and 3AC, but there is no major deviation here relative to the DJI in terms of price action, except <em>after</em> the capitulation (period in-between the two purple dashed lines), the DJI did bounce harder. See the picture below from a video of BCB for a clearer comparison of that period.</li> <li><strong>There was one instance of heavy decoupling between BTC and the DJI, when FTX collapsed</strong> (blue rectangle in pictures above, starting early November). The DJI moved up a lot while BTC dropped and made a new low. Not the version of the decoupling we had hoped for. </li> </ol> <p>The question is now, if the DJI dumps more, does BTC follow? Or can we decouple the right way? And would we have bounced hard without FTX?</p> <p><a href="https://preview.redd.it/c8kmjljtc98a1.png?width=1551&format=png&auto=webp&s=22d3bbe3e77c76db2990e8f631b7212ea860e7dc">Conclusion 2: Bitcoin chart with Dow Jones Index overlaid in blue line. Arrow is the time of the Luna/3AC collapse [thanks BCB!]</a></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Beyonderr"> /u/Beyonderr </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/zvpamp/serious_bitcoin_followed_the_stock_market_all/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/zvpamp/serious_bitcoin_followed_the_stock_market_all/">[comments]</a></span> </td></tr></table>