- Bitcoin‘s correlation with stocks appears to be weakening, with the cryptocurrency recently trading at around $93,000 while equity markets faced pressure.
- Analysts remain cautious about declaring a permanent decoupling, suggesting the trend may be temporary and linked to dollar weakness.
- Bitcoin has shown resilience during recent market selloffs triggered by global trade tensions, performing between Gold and the S&P 500.
Bitcoin reached approximately $93,000 on Tuesday, climbing nearly 7% in a day when stocks struggled, according to data from CoinGecko. The cryptocurrency’s price surged after U.S. Treasury Secretary Bessent indicated that trade tensions with China were “unsustainable” and likely to ease, as reported by Bloomberg.
This price movement came after Monday’s trading session where the S&P 500 and Nasdaq fell 3% while Bitcoin moved higher alongside gold. The dollar had weakened over the weekend following pressure from President Donald Trump on Federal Reserve Chairman Jerome Powell to reduce interest rates.
Short-Term Trend or Fundamental Shift?
Jake Ostrovskis, an OTC trader at Wintermute, suggested in a Tuesday note that the divergence between equities and Bitcoin might be temporary if it’s merely connected to dollar weakness. “I think the move is primarily being driven by USD weakness,” he wrote. “If that’s the case, the decoupling from equities may not hold once the DXY stabilizes.”
The cryptocurrency’s behavior has been notably different during recent selloffs. Compass Point analysts Ed Engel and Joe Flynn noted that Bitcoin’s 30-day correlation with the S&P 500 recently stood at 0.65, indicating a shift from its historically higher correlation during macroeconomic-driven market downturns.
Changing Market Perceptions
David Duong, head of research at Coinbase Institutional, told Decrypt that investors appear to be reconsidering Bitcoin’s role within broader markets. Since April 2, when Trump imposed widespread global tariffs, Bitcoin has performed somewhere between gold and the S&P 500.
Duong attributed this shift partly to “growing U.S. dollar debasement concerns” stemming from “unsustainable debt dynamics” and Trump’s willingness to target Powell. However, he cautioned against drawing permanent conclusions about Bitcoin’s market relationships.
“Bitcoin’s resilience in the last week while stocks maintained their downward trajectory seems to hint at shifting capital market assumptions,” Duong said. “However, I hesitate to say that Bitcoin has conclusively decoupled from traditional assets, as we would need to see this shift persist through varying market conditions before pegging it as a secular rather than cyclical trend.”
Most analysts agree it’s premature to determine whether Bitcoin has permanently transformed into a “safe haven” asset like gold, despite showing promising signs of independence from traditional risk assets in recent market conditions.
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