The correlation between digital assets and US stocks is close to historical highs

ChainCatcher news, according to Bloomberg, correlation studies show that the correlation between digital assets and the U.S. stock market has nearly reached historical highs, indicating that the macroeconomic variables driving the stock market are also affecting the cryptocurrency market.

Data compiled by Bloomberg shows that the correlation coefficient between an index measuring the 100 largest digital assets and the S&P 500 index is approximately 0.67 over a 40-day period, a level only surpassed in the second quarter of 2022 when it reached 0.72. A coefficient of 1 indicates that the assets move in perfect unison, while a coefficient of -1 indicates they move in completely opposite directions.

This week's focus will be on comments from Federal Reserve officials and the release of the U.S. Personal Consumption Expenditures Price Index (PCE). Sean McNulty, trading director at liquidity provider Arbelos Markets, stated, "We believe that the speakers are more important than the PCE inflation data, as the market is currently trying to understand the Federal Open Market Committee's (FOMC) reaction function."