📊 Consistently since early 2022, Bitcoin and the S&P 500 have maintained a fairly consistent correlation with one another as monetary policy and geopolitical events have impacted both at a similar level compared to any other point in crypto's existence. In other words, they tend to rise and fall in the same general direction when investor sentiment across risk assets changes. When the S&P 500 shows resilience (declining just -1.6% in the past week), it often signals that investors are still willing to take on some level of risk, which eventually spills into crypto. Conversely, when stocks decline sharply, Bitcoin tends to follow as traders de-risk across all speculative assets. And for now, a strong sign for patient cryptocurrency holders is the fact that equities (and even gold) are maintaining their levels well. Bitcoin’s performance has diverged significantly from the S&P 500 in the past week, dipping -12.2% and being on the brink of sub-100K levels for the first time in over 4 months. This sharp underperformance suggests that crypto markets may have become oversold. Extreme volatility in crypto often leads to a “rubber-band” effect, where traders’ capitulation can lead to a huge bounce-back once selling pressure subsides. If the S&P 500 stabilizes or begins to climb again, Bitcoin’s larger drawdown leaves much more room for upside momentum. There can be a favorable environment for a massive crypto relief rally once US and world stock markets start gaining positive momentum again. The recent decoupling between BTC and the S&P 500 may not be a sign of structural weakness, but actually an opportunity for traders who can wait out a bit more pain if necessary.(Santiment)