This is an ongoing study I am performing in regards to trend correlations between the SPY and BTC.
The SPY peaked on 6/13/18, which also happened to match up wonderfully with the reversal in trend for BTC on the exact same day.
I have not come to any long term decisions about trading around this,...hence why this is a study and not a trading method. Still, fascinating to watch unfold. If I were to treat this as a signal though, I would deduce the following.
This would be a signal to me that BTC's downward trend is not finished, as it had a trend reversal without the SPY also having a trend reversal.
Not quite that simple though. Say today the SPY finds support along the 4 hour 200 EMA and reverses trend bullish. I suspect BTC would have also had 6/25/18 (Monday) mark the point of it's lower high, and resume its downtrend.
Should the SPY continue to dump down to the daily 200 EMA, we would need to look at the current trend of BTC and assume a reversal would occur. So If BTC resumed downward movement today, and the SPY continues to dump today, I would be looking for a bullish reversal in BTC around the same time the SPY reaches the daily 200 EMA. On the other hand, If BTC were to continue an uptrend until the SPY reached the daily 200 EMA, I would be looking for a bearish reversal on that same day.
Coin desk and others have written articles about the possibility of a correlation, but I think they have approached it in the wrong way. They are looking for a correlation in price, where I think they should be looking for a correlation in trend reversals.
Thanks for reading,
-Icee-
Please leave me an upvote and remember this is not trading advice.