NEWSLETTER
bitcoin price had a mixed performance last week, rising to a new all-time high at some point before stabilizing around the $105,000 mark. While price action might have been somewhat sluggish in the past week, there is positive sentiment surrounding the leading cryptocurrency, something that is missing in the first two weeks of 2025.
This recent burst of optimism has seen the world's largest cryptocurrency by market capitalization continue to spread its wings in global financial markets. Interestingly, the latest data shows that the correlation between the price of bitcoin and the US stock market has reached a new high.
What does increasing correlation mean for btc and investors?
In a quick post on the Cryptoquant platform, an analyst under the pseudonym Darkfost <a target="_blank" href="https://cryptoquant.com/insights/quicktake/6794afdec09a2f3ea013f4e5-bitcoin-maintains-a-strong-correlation-with-the-US-Stock-Market” target=”_blank” rel=”noopener nofollow”>revealed that the price of bitcoin has remained closely linked to the performance of the United States stock market. According to data from Cryptoquant, the correlation between the price of btc and the NASDAQ index reached a new all-time high on Saturday, January 25.
For clarity, the NASDAQ Composite is a stock market index that tracks the value of almost all stocks listed on the Nasdaq Stock Exchange. Along with the S&P 500 and the Dow Jones Industrial Average, Nasdaq ranks as one of the most popular stock market indices in the United States.
<img data-recalc-dims="1" decoding="async" class="aligncenter" src="https://technicalterrence.com/wp-content/uploads/2025/01/Bitcoin-Correlation-With-US-Stock-Market-Hits-New-High-–.png" alt="bitcoin” width=”1280″ height=”720″/>
Source: CryptoQuant
Darkfost highlighted that the price of bitcoin and the NASDAQ index exhibited a historically strong correlation in 2024, continuing this trend into the New Year. Likewise, the price of btc and the S&P 500 index have become closely linked over the past year, even though there have been brief periods of decoupling.
According to the QuickTake analyst, the rising correlation suggests that institutional players are now more open to btc as an asset class, aligning its performance with traditional market trends.
Darkfost added:
With Trump now in charge, expectations of easier regulations, such as the rescinding of SAB 121, could further strengthen bitcoin's position as a recognized asset class among institutional investors, potentially accelerating its adoption.
The relationship between the bitcoin and United States stock markets has always been interesting as they provide various investment opportunities. However, a strong correlation between these two asset classes is seen to reduce the diversification opportunities they often offer investors.
bitcoin price at a glance
At the time of writing, the btc price is around $104,900, which does not reflect significant price movement in the last 24 hours.
The price of btc on the daily timeframe | Source: BTCUSDT chart on x/2vTOaWRo/" target="_blank" rel="noopener nofollow">TradingView
Featured image created by Dall.E, TradingView chart
