Financial markets end the year in a Psychological frenzy
The financial market moves to end the year depicted the true definition of the “roller coaster ride.” Records got broken on the U.S stock market with the biggest Pre-Christmas loss ever, followed by the biggest one day rally ever on the 26th, with Dow posting a gain of almost 1100 points, with another 1000 point swing the following day.
The volatility shook up the Cryptocurrencies as well — Bitcoin gave up most of the gains from the last week to drop below the support and staged another rebound which is holding at the time of writing. More details to follow later. The U.S Dollar remained edgy & indecisive with the widespread volatility in other markets lacking direction in thin markets. Let’s look at some numbers before moving on…
A recent article from the Wall Street Journal suggests that Bitcoin’s correlation with the Stocks remains high. The research by Excalibur Pro Inc. proclaimed a 0.84 correlation to Gold (a traditional hedge against market risk) for the past 5 days & a 0.77 to CBOE’s VIX (Volatility Index). Historically speaking, however, these claims can’t be corroborated. The price action in the Crypto kingpin this week certainly confirms the…
