Bitcoin-Nasdaq correlation reaches critical level, historically tied to 20% crashes

As Bitcoin proxy BlackRock IBIT’s correlation with the Nasdaq nears 70%, historical trends point to the likelihood of a soon-to-come divergence in performance.

Bitcoin’s (BTC) correlation with the Nasdaq appears to be inching closer to a level that has only been reached twice before right before BTC price crashed 20%, data from Singapore-based blockchain firm Matrixport reveals.

In a recent X post, Matrixport revealed that the 30-day realized correlation between Bitcoin proxy IBIT and the Nasdaq is likely due to such factors as the recent repricing of earnings expectations ahead of Q1 earnings season and the ongoing uncertainty surrounding global economic conditions.

“This correlation reflects the recent repricing of earnings expectations ahead of Q1 earnings season, along with ongoing uncertainty and the negative overhang from tariff discussions. As a result, Bitcoin is trading in line with the tech sector.”

Matrixport

Despite the current trend, Matrixport cautions that such high correlations typically do not last for long, noting that “such high correlations have historically been short-lived, suggesting that a divergence in performance between Bitcoin and the Nasdaq may be on the horizon.” The last two times the correlation reached this level, Bitcoin’s price dropped by more than 20%, according to data from crypto price aggregators.

While the latest correlation activity could point to Bitcoin potentially decoupling from the Nasdaq’s influence in the near future, there’s still no clear timeline or certainty that such a divergence will happen.

Meanwhile, spot Bitcoin exchange-traded funds returned to weekly inflows as BTC settled back above the crucial $85,000 support level, which analysts believe is necessary for the next leg higher. 10x Research’s Markus Thielen noted in a March 23 report that Bitcoin’s reversal indicators have turned bullish, with the 21-day moving average now at $85,200.