Bitcoin Shows Signs of Decoupling from Equities, Eyes New Highs

Since Donald Trump assumed office as the 47th U.S. President two months ago, the crypto and equities markets have demonstrated a strong correlation.

However, Bitcoin is now beginning to outperform the S&P 500, deviating from its historical “high-leverage tech stock” reputation. Early 2025 signals suggest that Bitcoin may finally break away from traditional market trends, setting the stage for independent growth.

Correlation Breakdown: A Bullish Indicator  

Historically, cryptocurrency markets have thrived during periods of low correlation with equities. As Bitcoin distances itself from the fluctuations of the S&P 500, the potential for a new bull market grows stronger. If BTC and altcoins continue to gain momentum independently of traditional markets, the chances of reaching new all-time highs increase significantly.

📊 Crypto and equities have had a fairly high correlation to one another ever since Trump’s selection as the 47th US President two months ago. Today, however, we’re beginning to see Bitcoin surge ahead of the S&P 500 (relative to their normal fluctuations).

For most of the past… pic.twitter.com/y4dWSYQsEt

— Santiment (@santimentfeed) January 6, 2025

Key Support and Resistance Levels for Bitcoin 

Bitcoin remains above a critical support zone between $95,400 and $98,400, where approximately 1.77 million addresses purchased over 1.53 million BTC. Currently, there is minimal resistance ahead, with only 107,000 BTC creating a supply wall between $104,700 and $105,770.

#Bitcoin sits well above an important support zone between $95,400 and $98,400, where 1.77 million addresses bought over 1.53 million $BTC. However, there isn’t significant resistance ahead, only a minimal supply wall of 107,000 #BTC between $104,700 and $105,770. pic.twitter.com/MEATFegTV2

— Ali (@ali_charts) January 7, 2025

The TD Sequential indicator has flashed a buy signal on the hourly chart near the 200-hour moving average at $97,000. If this support level holds, BTC could rebound and gain further momentum. However, a drop below $97,000 may push the price down to $92,000.

The TD Sequential indicator flashes a buy signal on the #Bitcoin $BTC hourly chart, right above the setup trend line and the 200-hour MA, near $97,000. If this support holds, #BTC may rebound.

A break below $97,000, however, could open the door for a dip to $92,000. pic.twitter.com/jevgNgKyEf

— Ali (@ali_charts) January 7, 2025

Institutional Inflows Fuel Optimism

Bitcoin spot ETFs witnessed a total net inflow of $987 million on January 6. Notable contributions came from Fidelity’s FBTC ETF ($370 million) and BlackRock’s IBIT ETF ($209 million).

Bitcoin spot ETFs had a total net inflow of $987 million on January 6, Fidelity ETF FBTC had a net inflow of $370 million, and BlackRock ETF IBIT had a net inflow of $209 million. https://t.co/59u0BnEqLG pic.twitter.com/0W2UDq35vW

— Wu Blockchain (@WuBlockchain) January 7, 2025

Conclusion

Bitcoin’s potential decoupling from equities and strong institutional inflows present a promising outlook. If BTC can maintain support and continue its upward trajectory, new all-time highs may soon become a reality.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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