Bitcoin [BTC] and S&P 500 parted ways, where is the king coin now?

• Bitcoin decoupled from the S&P 500 for the first time after the FTX debacle.
• Bitcoin sentiment improved but traders took short positions.

Bitcoin [BTC] had been leading the charge for bullish sentiment towards crypto for the past few days. Due to its positive rally over the past few weeks, its correlation with the S&P 500 has declined. In addition, there has been constant talk about how Bitcoin could act as an inflation hedge. This argument gained credibility as BTC decoupled from the S&P 500.

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Bitcoin’s daily correlation to the S&P turns negative for the first time since the FTX collapse pic.twitter.com/W4z0ePkxLR

— Will Clemente (@WClementeIII) February 21, 2023

How much is 1.10.100 BTC worth today?

As BTC’s prices surged, so did the king coin’s overall sentiment.

According to the data provided by Santiment, the weighted sentiment for Bitcoin was observed to increase. This implied that people from the crypto community had more positive than negative things to say about Bitcoin.

Due to the positive sentiment, Bitcoin’s overall network activity increased, as evidenced by the increase in the network’s daily active addresses. At the same time, BTC’s speed also increased, indicating an increase in activity.

Source: Santiment

Not only the number of transactions had increased. The average size of each transaction grew, as did the fee charged by miners. This increasing miner revenue eased the selling pressure.

Source: glass node

The tide could turn for bitcoin

However, bitcoin selling pressure could increase in the future. As address losses continued to decline, the incentive to sell BTC grew. This could be one reason trader sentiment fell. In addition, according to data from Coinglass, the number of short positions against BTC increased.

Source: coin jar

Read Bitcoins [BTC] Price prediction 2023-2024

Another reason for concern for BTC would be the increase in foreign exchange reserves. According to CryptoQuant data, currency reserves have grown by 0.67% in the last week. A high FX reserve could lead to more selling pressure.

Overall, while BTC decoupled from the S&P, there were a few factors that could reverse its rally at press time. Only time will tell if Bitcoin outperforms the S&P 500.

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