On Tuesday, July 5th, a Twitter user called the attention of Bitcoin traders to the S & P 500 index. According to Cyborg, Bitcoin mimics the moves of the stock index in lower time frames. Cyborg particularly used the chart on the one-minute timeframe to buttress his point.
Further, Cyborg believes Bitcoin traders need not analyze the market with the BTC charts. He stated that a bearish set-up might be spotted on the BTC Charts, while the SP-500 reveals a bullish setup. In times like this, he recommended that traders follow the SP-500.
Cyborg said: “There is no Bitcoin…. So, the solution is to chart SP500 first and then execute on BTC. That’s the only way kings, adapt.”
Should Bitcoin Traders Use the SP-500 Charts?
Admittedly, Cyborg’s discovery may be tempting to experiment with. Interestingly, there is no single right way to trade. A number of profitable traders have never used the SP-500 while trading Bitcoin. Yet, they have come out successful.
It is crucial for traders and investors to experiment with a trading concept or technique before implementing it. Also, in trading, previous successes do not guarantee future results.
SP-500 vs. Bitcoin
For the past few months, the crypto market has been on a downward spiral. The stock market has also been down. The SP-500 which represents the leading five hundred stocks in the United States has also carved an extremely bearish structure.
Although the crypto market moves in a similar pattern to the SP-500, cryptocurrencies have higher volatility. Since the start of the year, the S & P index is down by 20%. For Bitcoin, the loss is larger, Bitcoin is down by more than 50% for the year. Other cryptocurrencies like Ethereum and Solana have even recorded higher loss fractions.
Crypto investors expect that the volatility of cryptocurrencies will also work in their favor when the bulls enter the market. Bitcoin and blue-chip alts have outperformed stocks in the last ten years, and the expectations are the same for the next economic boom.
