There is a prominent narrative that Bitcoin (in orange) and the S&P500 (in blue) are decoupling--that BTC can rise even if the SPX falls.

This is something measurable, so let's try that.

We can track the correlation between the two over a 120 day period (teal line in the image at the bottom).

Currently, the correlation stands at .72. That’s not super strong, which allows for several weeks of different results, but it is statistically robust.

Logically, you’d only see a decoupling after a major adverse development, such as the US dollar losing world reserve currency status. And we're a long way from that.

In brief, as the stock market goes, so BTC will go … over a 4-month period roughly.

Happy Trading!

-Sebastian Purcell, PhD

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