Bitcoin BTC/USD has fallen 12% as the S&P 500 remained flat, breaking a long-standing correlation between the two risk assets.
What Happened: On-chain analytics provider Santiment shows data that Bitcoin dropped 12.2% over the past week compared to a 1.6% drop for equities.
Historically, Bitcoin has moved in tandem with equities as global risk sentiment fluctuates. The current underperformance, despite similar macro pressures, points to disproportionate selling in crypto relative to traditional markets.
With stocks and gold holding steady, analysts believe Bitcoin's deeper decline could set up a "rubber-band" rebound once selling pressure subsides. If the S&P 500 resumes its climb, Bitcoin's steeper pullback could offer greater upside potential during the next risk-on phase.
Also Read: Bitcoin, Ethereum, XRP, Dogecoin Rally 2% Despite Over $250M In ETF Outflows
What's Next: Santiment noted that monetary and geopolitical factors have affected both markets equally, making this divergence even more striking. Historically, similar decoupling's have preceded relief rallies in crypto once broader market sentiment improves.
A poll found 46.5% of traders still expect Bitcoin to break its all-time high ($125,800) by year-end, while 37.6% remain skeptical. Analysts cautioned that markets often move opposite the crowd's expectations, implying a potential upside surprise if bearish sentiment persists.
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