Bitcoin [BTC] and the S&P 500 diverge, where is it now for the royal coin?

• Bitcoin was disconnected from the S&P 500 for the first time after the FTX debacle.
• Sentiment for Bitcoin improved, but traders took short positions.

Bitcoin [BTC] had led the charge for the bullish sentiment around crypto in recent days. Due to the positive rally in recent weeks, the correlation with the S&P 500 fell. Also, there has always been talk of how Bitcoin can act as an inflation hedge. This argument gained more credibility when BTC was 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) 21 February 2023

How much is 1,10,100 BTC worth today?

As BTC’s prices rose, so did the royal coin’s overall sentiment.

According to data provided by Santiment, it was observed that the weighted sentiment for Bitcoin increased. This suggested 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, which is highlighted by the increase in the network’s daily active addresses. Along with that, BTC’s speed also rose, indicating an increase in activity.

Source: Sentiment

It wasn’t just the number of transactions that had increased. Average size of each transaction as well grew, as did the fee collected by miners. This increasing mining income reduced the selling pressure.

Source: glassnode

The tide may be turning for Bitcoin

However, Bitcoin’s selling pressure may increase in the future. As addresses in losses continued to decline, the incentive to sell BTC grew. This may be one of the reasons why trading sentiment fell. Additionally, according to data provided by Coinglass, the number of short positions taken against BTC increased.

Source: Coinglass

Read Bitcoins [BTC] Price prediction 2023-2024

Another cause for concern for BTC will be the increase in foreign exchange reserves. According to CryptoQuant’s data, Exchange Reserves has grown by 0.67% in the past week. A high foreign exchange reserve can lead to more selling pressure.

Overall, even if BTC decoupled from the S&P, there were some factors that could reverse the press time increase. Only time will tell if Bitcoin outperforms the S&P 500.