BTC’s Correlation with the Nasdaq 100 Index Hits a New All-Time High

Since the beginning of the coronavirus pandemic, BTC (BTC) has shown a tendency to move in the same direction as large companies listed on the Nasdaq 100 index.

But recently, as analyst Ana Nicenko has pointed out, this correlation has become closer than ever.

According to the analyst, the 40-day correlation between the Nasdaq 100 index and the largest cryptocurrency by market cap hit an all-time high of 0.6945 on April 8.

“The increase further erodes the argument that BTC works well as a diversifier, which was considered by proponents to be key to its appeal,” said analyst Joana Ossinger, reviewing the chart above.

The Nasdaq 100 includes 100 of the largest domestic and international non-financial companies by market cap listed on the Nasdaq Stock Market. This includes innovation leaders like Apple (NASDAQ: AAPL ), Microsoft (NASDAQ: MSFT), Tesla (NASDAQ: TSLA), Amazon (NASDAQ: AMZN) and Amgen (NASDAQ: AMGN).

However, Niceko points out that the trend of BTC returns are still outperforming the average return on investment (ROI) of the world’s major indices:

“In other words, BTC’s ROI has outperformed the S&P 500, Dow Jones Industrials and Nasdaq indices by 1,645% in the last 5 years.”

BTC price

In addition, the analyst also highlighted that the last few days have been difficult for BTC. After all, the cryptocurrency failed to successfully retest two exponential moving averages (EMAs) of the bull market.

“BTC is currently trading at its lowest level in about two weeks, bringing down the value of the global cryptocurrency market that had just reclaimed the $2 trillion level at the end of March,” she says.

Meanwhile, analyst Akash Girimath pointed out that things are likely to remain tough for BTC.

“A sudden spike in selling pressure that pushed BTC below the $40,490 level is invalidating any bullish thesis and could pave the way for a retest of the $34,752 support barrier,” he highlighted.