Bitcoin Price Declines as Correlation with Stocks Hits Lowest Point Since FTX Collapse

Bitcoin has been experiencing a considerable decline in price, with its correlation to traditional stocks reaching a record low since the FTX collapse. This observation highlights a growing disconnection between Bitcoin’s performance and that of riskier assets such as stocks and gold.

Key Takeaways

Bitcoin has seen a 43% decline in price over the past six months.
The correlation between Bitcoin and stocks is the weakest since late August, indicating independent movement.
Bitcoin’s technical indicators suggest a bearish trend overall.
Key support levels are around $63,900–$64,000, with significant resistance near $70,000.

Bitcoin Price Declines as Correlation with Stocks Hits Lowest Point Since FTX Collapse

Bitcoin's Weakening Price Dynamics

Recent observations show that while Bitcoin has been undergoing a downturn, traditional risk assets like the S&P 500 and gold have behaved differently. The S&P 500 index increased by approximately 7%, and gold's price rose by about 51%. In contrast, Bitcoin dropped around 43% over the past six months, reflecting a stark divergence in performance among various asset categories.

Bitcoin vs. Stocks & Gold Correlation. Source: Santiment

According to data from Santiment, the current decoupling indicates that Bitcoin is experiencing its weakest correlation with stocks since late August. This suggests that Bitcoin is now moving somewhat independently of traditional market trends. Historical analysis shows that such significant deviations in correlation often lead to a reversion in future cycles.

Signs of Technical Weakness in Bitcoin's Price

This notable disconnection in correlation is occurring alongside identifiable technical weaknesses in Bitcoin's price framework. Currently, Bitcoin is priced at around $65,420, with an intraday high of approximately $66,284.59 and a low near $62,553.19, which marks a daily gain of about 5%.

BTC/USDT 1-D Price Chart (Source: TradingView)

Despite this minor recovery, the technical outlook remains bearish. The 50-day moving average is located around 79,672 USDT, which is below the 200-day moving average close to 98,159 USDT. This formation, commonly referred to as a “death cross,” signals that the medium-term trend for Bitcoin is downward. Bitcoin's current price is significantly below these moving averages, indicating that the recent gains are insufficient for a strong recovery.

For the past few weeks, Bitcoin's price has oscillated between approximately $60,000 and $70,000, a range indicating consolidation. However, the pattern of lower highs suggests that sellers continue to dominate the market.

When analyzing the Relative Strength Index (RSI), a momentum indicator, it stands at 35.26. Although it has rebounded from oversold conditions, it remains beneath the neutral mark of 50, continuing to signal bearish momentum.

If Bitcoin maintains its current pressure, support levels are seen around $63,900–$64,000, with an important psychological level at $60,000. Should Bitcoin drop below $60,000, further declines toward 55,000 USDT could occur. On the upside, resistance is expected near 70,000 USDT, and at the 50-day moving average around 79,672 USDT. The 200-day moving average, situated near 98,159 USDT, also presents a substantial resistance level.

In conclusion, Bitcoin's price shows signs of weakness, lacking any clear indicators of reversing the recent downward trajectory.