How does Bitcoin’s correlation with other assets influence its price?

How does Bitcoin’s correlation with other assets influence its price?

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Bitcoin’s correlation with traditional assets like stocks, gold, or fiat currencies affects the BTC price by determining how it reacts during market shifts. Sometimes, Bitcoin behaves like a risk asset, moving in tandem with stock markets during bullish or bearish periods. Other times, it acts as a safe haven, showing little correlation or moving inversely to traditional markets.

Understanding these correlations helps investors build diversified portfolios and predict how Bitcoin might perform under different economic conditions. Tracking correlation trends along with the BTC price offers a clearer picture of Bitcoin’s evolving role in global finance.

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