Bitcoin’s connection to the traditional stock market has reached new highs, with its correlation to the S&P 500 now standing at 80%, according to CryptoQuant analyst Axel Adler Jr.
This heightened link suggests that macroeconomic drivers such as interest rate expectations, liquidity conditions, and broader risk sentiment are now playing an even more direct role in shaping Bitcoin’s short-term performance.
Under these conditions, equity market rebounds are likely to provide a lift to BTC, while downturns could amplify selling pressure in the crypto market.
Adler notes that the current figure is based on a 1-week rolling correlation—a measure prone to volatility—and warns that such extreme readings rarely persist for more than a few weeks.
Technical data shows Bitcoin trading around $116,568 at press time, with recent price action reflecting tight consolidation after a recovery from lows near $112,000 earlier in the week. The Relative Strength Index (RSI) sits at 45.54, signaling a neutral momentum state, while the MACD remains slightly in negative territory, hinting at a cautious market stance.
Bullish Scenario
If equity markets extend their recovery and risk appetite returns, Bitcoin could push toward the $118,500–$120,000 zone in the short term. A breakout above this range could trigger momentum buying, with potential to retest the $123,000 level seen in July. Strength in the S&P 500 and supportive macroeconomic data would likely fuel such a rally, especially given the strong correlation.
Bearish Scenario
If stock markets falter or macro data sparks fears of a slowdown, Bitcoin’s high correlation could work against it. A drop below $114,000 may trigger more aggressive selling, with the next key support sitting between $111,500 and $110,000. Weakness in equities, coupled with risk-off sentiment, could see BTC revisiting these lower levels sooner than expected.
While short-term volatility persists, the strong alignment between Bitcoin and the S&P 500 underscores the growing influence of macroeconomic forces on digital assets. For traders, this means monitoring equity market trends could be just as critical as watching crypto-specific news in the weeks ahead.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/market/bitcoins-80-stock-market-correlation-could-trigger-a-major-price-move/