Is there a correlation between the price of bitcoin and the spread of the Coronavirus Covid19 pandemic?
According to Santiment this correlation exists and is still very evident.
📌Price is represented by the green line.
📌The blue bars indicate the total amount of mentions over time on social platforms (social volume)
— Santiment (@santimentfeed) April 20, 2020
The company has published on Twitter a chart showing a three-month comparison between the BTC price curve (in green), the total amount of bitcoin mentions overtime on social platforms (in blue), and the percentage of quotes related to the coronavirus compared to all other monitored keywords related to cryptocurrency (in brown).
It is really evident how this last brown curve seems to follow the blue bars and how the price curve seems to be inversely related to these two.
In this regard Santiment says:
“Is Coronavirus fear still correlated heavily to the price of $BTC? According to what we see, the answer is still a very clear YES”.
The maximum peak of the percentage of coronavirus mentions was on March 12th, at the same time as the maximum peak of mentions of the word bitcoin, although since then they have fallen further compared to the percentage of coronavirus mentions.
But, despite this, the blue curve seems to be quite aligned with the brown curve.
It should be noted that the minimum peak of the green price curve was on March 16th, four days later, and that the rise of the latter seems to have stopped on April 7th, while the other two curves have continued to fall since then.
Another curious thing is the comparison of the three curves at the end of January, when the brown curve had its first peak, after which BTC’s price actually increased.
In those days the blue curve had grown very little, showing that at that time the correlation was smaller, and actually positive.
But already from the beginning of February, the correlation seems to have strengthened, becoming inverse, i.e. with the BTC price going up while the brown curve was going down.
From February 23rd, the correlation begins to appear evident, with a second peak for the brown curve, followed by the blue one, and a first significant drop in the price of bitcoin, whereas from March 9th it becomes obvious.
However, to have a complete picture it would be necessary to include at least the curve of some stock indexes, such as the S&P 500, because it is likely that the impact due to the Coronavirus pandemic is not specific to the crypto markets, but more generally related to all financial markets, of which cryptocurrencies are now fully part.