Crypto market defies tech stock slump as Bitcoin breaks $66,000 amid Trump rumors
Bitcoin and the wider crypto market are rallying despite a downtrend in the equities markets, particularly in tech stocks, pointing to a breakdown in correlation between the two.
The flagship crypto surged over 4% over the past few hours to $66,377 as of press time, based on CryptoSlate data.
Meanwhile, other top tokens like Ethereum and Solana were up 2.24% and 7.8%, respectively with ETH trading at $3482 and SOL at $170 as of press time.
Tech correlation
The crypto market recorded a significant surge as New York trading began, climbing to new monthly highs despite most equities falling at the same time. This is a notable breakdown in the correlation between crypto and tech stocks, specifically, which have mostly moved in tandem since roughly 2020.
The correlation has often been linked to rising adoption among institutional investors, who view Bitcoin and other cryptocurrencies through a similar lens as tech stocks, leading to synchronized trading patterns.
Studies have shown varying degrees of correlation between Bitcoin and tech stocks. For instance, during certain periods, the correlation coefficient between Bitcoin and the NASDAQ-100 index (which is tech-heavy) has increased, indicating a stronger relationship.
Despite the growing correlation, there are still periods when Bitcoin and tech stocks diverge due to unique events affecting the crypto market, such as regulatory news or significant developments in blockchain technology.
Market uptrend
Bitcoins latest rally is fueled by several factors, the most prominent of which are rumors that former President Donald Trump may plan to announce intentions to make BTC a strategic reserve asset for the US.
Trump has fully pivoted to a pro-crypto stance in recent weeks as the issue has become increasingly important among many voters. He has garnered widespread support among tech and crypto industry leaders, who believe his policies will be more favorable for both sectors.
Strong support from a Presidential candidate currently favored to win has given Bitcoin new momentum after it fell to a multi-month low amid Germanys recent sales.
Meanwhile, Solana has been outperforming most of the top 10 tokens as meme frenzy continues to grip the community despite a significant slowdown compared to earlier in the year. The latest rally in SOL has also led to a notable increase in most of the top memecoins.
SOLs momentum is primarily driven by increased adoption and the expectation that it will be the next token to get the ETF treatment. Some firms have already filed applications for a spot Solana ETF.
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Text source: CryptoSlate
