Bitcoin has recently lagged behind US equities, sparking renewed debate over whether the cryptocurrency has reached a market bottom. Crypto analyst Niels suggests that before Bitcoin finds its cycle low, it may undergo another sharp wave of selling, potentially triggered by a downturn in stock markets.
BTC vs. S&P 500: Relative Performance in Focus
Pointing to the BTC/SPX ratio, which measures Bitcoin’s relative performance against the S&P 500 index, Niels notes that Bitcoin is still trailing US stocks. According to the analyst, a significant drop in the equity markets could drive one last capitulation for Bitcoin, with the potential for BTC to outpace traditional markets in its aftermath.
Analyst Niels considers that a possible crash in stocks could trigger a final wave of selling in Bitcoin, after which BTC might begin to outperform equities.
Charts shared by Niels highlight historical support and resistance zones in the BTC/SPX ratio, illustrating that Bitcoin has not been able to establish sustained relative strength over stocks. The analyst does not view this chart as a direct price prediction, but rather as a framework showing the influence of broader macroeconomic forces on BTC.
Glossary: The BTC/SPX ratio compares Bitcoin’s performance to the S&P 500 index. A rising ratio signals Bitcoin is outperforming stocks, whereas a decline indicates it is lagging behind.
Macroeconomic Factors at the Forefront of Bitcoin Pricing
Historically, Bitcoin has tended to move in tandem with tech stocks during periods of tight monetary policy and muted risk appetite. High interest rates and economic uncertainty have limited demand for risk assets, leading to similar price reactions in both BTC and the stock market.
However, previous cycles also demonstrated that Bitcoin can diverge from traditional markets over time. During periods of increased liquidity and recovering investor confidence, BTC has outperformed many equity indicators. Whether this trend reemerges will largely hinge on macroeconomic data and flows of institutional capital.
ETFs Shifting the Landscape from Previous Cycles
Unlike past market cycles, Bitcoin is now supported by broader institutional participation thanks to the advent of spot BTC ETFs in the United States. The BlackRock iShares BTC Trust has quickly become one of the fastest-growing products, underscoring sustained institutional interest despite volatile market conditions.
BlackRock data shows the iShares BTC Trust is among the fastest-growing spot Bitcoin ETFs, indicating that institutional interest persists even during turbulent times.
These ETF inflows have created a new demand source absent in previous cycles. While institutional buying can help counterbalance selling pressure, a wider market downturn could still weigh on BTC in the near term. Investors reducing risk in other markets may also put additional pressure on Bitcoin’s price.
Stocks and Market Sentiment May Dictate Bitcoin’s Next Move
Bitcoin’s next phase may depend on whether US equities can maintain their current momentum or succumb to a deeper correction. Should stocks experience clear weakness, BTC may first face renewed selling before eventually strengthening its relative performance.
This scenario reflects a single analyst’s assessment rather than a definitive market forecast. In the coming period, investors will closely monitor macroeconomic data, Federal Reserve policy, ETF flows, and on-chain indicators to better understand Bitcoin’s direction.
