Over the past few years, Bitcoin has generally moved in sync with equities, especially tech/internet-heavy indices like the Nasdaq or the S&P 500. During times of risk-off, both tended to fall; during risk-on, both rose. However, lately there are increasing signs that this coupling is weakening. In the past few week Bitcoin is behaving more on its own, diverging from stock market movements.
The correlation I'm talking about is a statistical measure (typically -1 to +1) of how two assets move together. A high positive correlation means they tend to go up or down together; near zero means independent; negative means moving opposite. Galaxy analysts observed ~ 0.62 with the S&P 500, ~ 0.64 with the Nasdaq with in the last 30 days. That’s a moderately strong positive correlation, but not extremely tight. It suggests that often Bitcoin still moves with equities, but not always in lockstep. In 2024, correlation with S&P went up to ~0.88.
So Why Might This be Happening?
In the past this has been the potential start of an altseason and that capital may be rotating. I have not been able to find definitive proof of large scale rotation away from crypto into stocks, so the case for an altseaosn still holds.
To be more confident that an altseason is underway, here are things to watch:
Consistent outperformance across a broad set of altcoins: More than just a few winners; the majority of top 50-100 altcoins need to outperform BTC over 30-90 days.
Further drop in Bitcoin dominance: If BTC dominance continues its decline (say toward < 55-50%) that could affirm rotation.
Strong volume & liquidity in altcoins — Look for surges in trading volume in altcoins, this indicates strong buyer interest.
Positive macro tailwinds: Rate cuts, favorable regulation, institutional interest in alt narratives (DeFi, AI, NFTs, etc.).
I'd love to know your thoughts on a possible altseaon. It may seem funny to be predicting this as prices are bleeding today, but all I know Hive needs to see some appreciation.
