Current Correlation Rates and Metrics Analysis Between Bitcoin and US Markets!

• Bitcoin is currently trading at $27,200, with a 1.70% increase in the last 24 hours. The Dollar Index (DXY) stands at 105.062.
• Bitcoin (represented by the blue line) generally exhibits higher volatility compared to DXY, SP500, Dow Jones, and Nasdaq. BTC maintained its price movement with low volatility from July 21 to August 16, becoming less volatile than Nasdaq during this period.
• The correlation between Bitcoin and the US markets is currently low. Bitcoin was highly correlated with US markets between August 18 and September 1.

Is Bitcoin still tracking the US markets? Let’s explore the current correlation data between Bitcoin and US markets, as well as volatility comparisons!

Volatility in Bitcoin’s Price and US Markets

The similarities or correlations between Bitcoin and US markets have always been a topic of discussion. Bitcoin has drawn attention with its correlation with US stock markets, which can sometimes be positive or negative.

Currently, Bitcoin is trading at $27,200, with a 1.70% increase in the last 24 hours. The Dollar Index (DXY) is at 105.062 and has not shown a percentage change in the last 24 hours. In our first graph, we will compare the volatilities of Bitcoin and the US markets.

The deep decline in Bitcoin’s volatility between July and August led to dull times for crypto investors. This volatility even dropped below that of US markets.

As seen in the graph above, Bitcoin (blue line) generally exhibits higher volatility compared to DXY, SP500, Dow Jones, and Nasdaq. BTC maintained its price movement with low volatility from July 21 to August 16, becoming less volatile than Nasdaq during this period. Currently, Bitcoin’s volatility percentage is 22.10%. Here are the current volatility rates for other assets: Nasdaq at 17.70%, SP500 at 11.70%, Dow Jones at 9.03%, and the Dollar Index with the lowest volatility at 5.45%.

Correlation Between Bitcoin and US Markets

The correlation between Bitcoin and US markets has always been an interesting topic for investors. Correlation can be negative or positive. For example, when there is a negative correlation rate, it means Bitcoin moves in the opposite direction of the other asset. Conversely, when there is a positive correlation, it means Bitcoin follows the other asset.

Here is a graph reflecting the correlation between US markets and Bitcoin:

The current correlation between Bitcoin and US markets is currently low. Bitcoin showed a high correlation with US markets between August 18 and September 1. For instance, its correlation with the US dollar was -0.8 at the end of August, which is a significant correlation compared to the current rate. The current correlation rates between Bitcoin and US markets are as follows:

• Correlation between Bitcoin and the US Dollar Index is negative, with a rate of -0.09.
• Correlation between Bitcoin and Dow Jones is positive, with a rate of 0.28.
• Correlation between Bitcoin and S&P 500 is positive, with a rate of 0.11.
• Correlation between Bitcoin and Nasdaq is positive, with a rate of 0.02.

Risk and Return

Another noteworthy metric is the “Sharpe Ratio.” According to IntoTheBlock, it calculates the Sharpe Ratio of assets by dividing the returns of assets by the standard deviation of their daily performances over the selected time frame. The higher the Sharpe Ratio, the better an asset’s risk-adjusted return.

In this context, we will evaluate this metric based on 30-day performance. The Sharpe Ratios for assets according to their 30-day performances are:

As seen in the visual, the highest ratio is 0.26 for the Dollar Index. Following DXY is S&P 500 with a ratio of 0.13. Bitcoin comes next with 0.06, followed by Dow Jones with 0.03. Ethereum, with a negative Sharpe ratio of -0.06, is at the bottom.

According to data from IntoTheBlock, DXY and S&P 500 perform the best in terms of risk-adjusted returns in this metric.