Cointelegraph takes a look at five things to consider when working out where Bitcoin is headed in the coming days.
S&P 500 nears all-time highs… again
Unlike previous weeks, macro markets and their impact on Bitcoin are back in the spotlight on Monday.
China leads the way, with its stocks rallying to near their highest levels in two years on news that the People’s Bank of China, or PBoC, is planning to ease monetary policy.
The Shanghai Composite Index rose 2.3% on the day, with year-to-date gains sitting at 13% despite the coronavirus turmoil.
Elsewhere, the S&P 500 is already up over 50% versus its March crash lows, with Goldman Sachs analysts revising their end-of-year forecast upwards. The target is now 3,600 points, not 3,000 — a new record high.
Even at publishing time, the index was just 14 points away from the all-time highs it had seen in February before coronavirus hit.
Bitcoin Vs. S&P 500 1-year chart. Source: Skew
“As the last few months have demonstrated, equity prices depend on not just the expected future stream of earnings but the rate at which those earnings are discounted to present value,” Bloomberg quoted Goldman’s David Kostin as writing in a note Friday.
“Looking forward, a falling equity risk premium will outweigh a rise in bond yields, and combined with our above-consensus EPS forecast, will lift the S&P 500 Index to 3,600 by year-end.”
Stocks previously exerted significant influence on Bitcoin, with its S&P 500 correlation already at 95%. As Cointelegraph reported, despite gold taking over in recent weeks, analysts still believe that a dramatic change in stocks would be reflected in Bitcoin as well given the recent correlation all-time highs.
Bitcoin gold correlation. Source: Skew
Bitcoin’s correlation to gold has dropped since the latter lost its $2,000 support level — from 68% to 48% in August,…