Recent trends indicate a renewed correlation between Bitcoin (BTC) and the S&P 500, which poses a short-term risk for BTC prices, as analyzed by André Dragosch from Bitwise. After diverging since the election of Donald Trump, both asset classes are now moving closely together, achieving a correlation of 0.88. Factors such as a hawkish interest rate outlook from the Federal Reserve, which has revised its planned rate cuts for 2025, have affected traditional stocks. Despite these challenges, Bitcoin has seen a 47% increase since November 5, outperforming the S&P 500, which rose only 4%. This discrepancy is attributed to Bitcoin's friendly political outlook and a decline in exchange balances. Dragosch notes that while on-chain metrics are currently supportive for Bitcoin, the deteriorating macroeconomic environment could threaten its stability. Investors should be cautious due to the increased correlation with traditional equity markets, especially in light of the current economic pressures.

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