Bitcoin And S&P Decline Together, But Data Predicts A Turnaround

Christian Encila

3 months ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Bitcoin is not the only one that has suffered. Investors are becoming concerned as the flagship cryptocurrency has followed the recent decline in the S&P 500. But if past performance is any indication, Bitcoin might be experiencing a resurgence.

United States President Donald Trump assumed office in November for a second term, but since then, the US stock market has dropped by about 10%. Since the global recession hit the markets hard in 2009, this is the worst start to a US presidency. Although there are numerous causes for this decline, uncertainty on economic strategy and worries about inflation have contributed.

In the past, it has often signaled impending volatility when the S&P 500 and Bitcoin decline simultaneously. The bear market of 2022, which saw prolonged losses, was the last time both markets fell precipitously at the same time. Not all dips, though, lead to protracted downturns. Some have led to a notable rebound, especially since the cryptocurrency’s halving cycles.

How is the market reacting to Trump’s second term?

Since his return, the S&P 500 has fallen 9%, marking the worst start to a presidency since 2009.

Back then, a recession drove the drop. This time, uncertainty is in the driver’s seat.

Let’s dive into the data 🧵👇 pic.twitter.com/A10F0qtweB

— CryptoQuant.com (@cryptoquant_com) March 12, 2025

Bitcoin And Stocks Moving Together—For Now

Bitcoin has long been known as “digital gold,” but it is now functioning more like a tech stock. According to a CryptoQuant research, Bitcoin’s price has tracked traditional markets, particularly the S&P 500. This pattern is not new. During the COVID-19 pandemic in March 2020, the crypto and stocks fell together before recovering later that year.

But IntoTheBlock analysts found that Bitcoin’s relationship to the S&P 500 has dropped to essentially zero. This would suggest that, in line with long-term holders’ pattern, BTC is starting to migrate outside of conventional finance.

Should this decoupling continue, the movement in the price of Bitcoin might rely less on changes in the stock market.

Bitcoin and S&P 500 correlation. Source: NewHedge

Historical Trends Suggest A Recovery

According to CryptoQuant, prior data shows that Bitcoin has frequently rebounded following strong corrections. For example, in 2018, Bitcoin lost approximately 80% of its value before recovering in 2019. Similarly, following the 2020 crash, Bitcoin reached fresh all-time highs in 2021.

BTC is now trading at $82,449. Chart: TradingView

Another statistic to keep an eye on is the Coinbase Premium Index, which measures the difference in Bitcoin prices between Coinbase and Binance. When this indicator goes negative and then returns to positive territory, it has typically indicated an impending price rebound.

Caution And Optimism Among Analysts

Meanwhile, market analysts remain divided. Some warn that Bitcoin’s downturn could signal that the overall stock market rise is unsustainable. Tyler Richey, co-editor of Sevens Report Research, stated that Bitcoin’s underperformance compared to its January peak could be a warning sign for equities.

Featured image from Gemini Imagen, chart from TradingView

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.