Bitcoin's Resilience: Decoupling from Equities Amid Volatility

Bitcoin's Resilience Amid Market Volatility Raises Questions About Correlation with Equities

Bitcoin has shown remarkable resilience in recent days, decoupling from the volatile U.S. stock market and stabilizing despite ongoing market uncertainty. This behavior has sparked discussions among analysts about the cryptocurrency's correlation with traditional equities.

Bitcoin's performance has been closely watched as it faced a tumultuous start to the week, dropping alongside U.S. stocks amid concerns about overvaluation in the AI sector following the launch of DeepSeek by China. However, Bitcoin has since recovered more effectively than traditional equities, leading some analysts to suggest it may be stabilizing and showing signs of resilience.

André Dragosch, European Head of Research at Bitwise, observed that Bitcoin's gradual stabilization while the Nasdaq continued to slide is an encouraging sign. He pointed out that Bitcoin outperformed the Nasdaq over the past two trading days, showing limited downside.

On-chain data suggests the Bitcoin market still has more room to grow despite the prevalent uncertainties. In a recent report, Glassnode revealed that new Bitcoin investors, who have held the cryptocurrency for less than three months, currently control 50.2% of its wealth. This figure is significantly below the levels seen during previous market peaks, indicating the market still has room to grow before reaching speculative extremes.

Market watcher IT Tech highlighted Bitcoin's realized cap and UTXO (unspent transaction output) age bands, which track coin movement across different holding periods. Historically, market tops align with a high proportion of younger UTXOs (held for one day to three months). While younger UTXOs have been increasing recently, their levels remain below those of previous cycle tops, signaling that Bitcoin has further upside potential before reaching the distribution phase.

Analysts remain bullish on Bitcoin. Michaël van de Poppe, a seasoned market veteran, commented on Bitcoin's recent gains, describing its daily recovery as impressive. He argued that Bitcoin's trajectory will likely depend on the outcome of the Federal Reserve's upcoming meeting. While markets do not anticipate a rate cut, van de Poppe suggested such a move would be a positive surprise and could fuel further gains for Bitcoin.

Rekt Capital, another analyst, believes Bitcoin has completed its initial price discovery correction. Citing historical data, the analyst suggested that Bitcoin may soon begin its second price