The crypto market has persisted in tracking the stock market closely. The trend has been recently noted in the market performance of Ethereum, the second-largest crypto by market cap.
ETH climbs as S&P 500 records gains
Per data from crypto market behavior analysis platform, Santiment, following a positive close in the S&P 500 index the price of ETH has also increased. The S&P 500 saw an increase of 1.8%, pulling the price of ETH back above $2930 – an about 2.72% increase on the day.
Aided by a +1.8% day in the SP500, Ethereum has jumped back above $2,930 with its tight correlation to equities markets, Santiment said in a tweet.
The data also pointed out an encouraging sign in Ethereum’s on-chain data. The number of whale transactions exceeding a value of $100,000 has increased significantly on the day, with 1,451 such transactions recorded in a 4-hour period today. Santiment opined that the spike indicates that key stakeholders are taking notice of the price climb.
Significantly, the trend of massive whale movements has been noted for a while now. Per data from WhaleAlert earlier this week, Ethereum whales moved over 85,000 ETH in a single day. Santiment also previously noted other highly positive signs in the Ethereum ecosystem including an increase in the number of unique interactions, as well as a two-month high level of social discussion mentioning ETH.
Is high correlation with equities a threat for ETH?
While the tight correlation with the stock market is yielding positive gains for ETH at the moment, analysts with a gloomy outlook for the market fear that the relationship could lead to carnage in the crypto space.
According to Arthur Hayes, the former CEO of BitMex, the stock market is poised to crash massively through 2022 as the Fed tightens monetary policy to fight inflation. This could drive the price of ETH to around $2500, he said.
The Fed’s recent interest rate hikes have been having a clear-cut effect on both the crypto and stock market. However, Hayes recently disclosed that in the long-term, he expects crypto to overcome all ties to stocks and outperform most major economies
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.