Bitcoin: Why are cryptocurrencies struggling to keep up with the stock market?

• Despite all-time highs in the major US indices and gold, Bitcoin is lagging behind.
• The Bitcoin/S&P 500 ratio is in bearish consolidation, indicating a divergence between the stock market recovery and cryptocurrency risk.
• Bitcoin must remain above the 50-day moving average to maintain bullish momentum, with a break below signaling a bearish outlook.
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Among the all-time highs of all major US indices, namely , , and , as well as in the market, it seems to be the only asset that is lagging behind.

The following two graphs may help illustrate my point. While the S&P 500 has been in a relentless long-term uptrend, the Bitcoin/S&P 500 ratio has been trading in a bearish consolidation for most of this year.



This divergence is quite interesting for a first market analysis, as it highlights how the stock market recovery has diverged from cryptocurrency risk. Unlike major stock indexes, Bitcoin is more than 8% below previous highs, but a confirmed upward breakout could signal a new uptrend.

Furthermore, this development has several important implications:

• This suggests the continuation of broader crypto underperformance. The breakout could indicate increasing risk appetite during this rally, or perhaps an increase in investors’ overall risk tolerance.
• The uptrend could boost investor confidence, potentially bringing Bitcoin back to previous highs.
• From a technical point of view, this could be seen as a continuation flag pattern, which will likely lead to a breakout and new cyclical highs. The BTC vs. ratios The S&P 500 currently indicates a bullish trend, suggesting an overall positive bias towards risky assets.

Technical view

At this stage, it is crucial that BTC remains above the 50-day moving average to maintain this momentum.

Bitcoin has decisively used the 50-period average over the last year and a half as dynamic support; every time it has recovered the average it has been bullish, recording very positive performances.

Consequently, a break below this average would completely change the outlook, projecting it towards the 200-day moving average. Currently, Bitcoin is trading well above this level, supporting three theses:

• The angular breadth of the 50- and 200-period averages confirms the bullish trend.
• If the price retests the 200-day average, it could serve as potential support.
• If the price falls below the 50-day and 200-day averages, it will be a strong bearish signal.

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Disclaimer: This article is written for informational purposes only; does not constitute a solicitation, offer, advice or recommendation to invest as such it is not intended to encourage the purchase of assets in any way. I would like to remind you that any type of asset is evaluated from multiple points of view and is highly risky and therefore any investment decision and the associated risk remain the responsibility of the investor.

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