Bitcoin falls 20% over 90 days as S&P 500 rises 5%

Bitcoin has shed roughly 20% of its value over the past three months, landing near $64,000, while the S&P 500 climbed about 5% over the same stretch to hit record highs. The divergence is striking, even by crypto standards, and it’s happening during a period when risk appetite in traditional markets is alive and well.

The numbers tell a painful story

From mid-May through August 10, Bitcoin dropped approximately 20.7%, sliding from elevated levels to close around $64,845. As of August 11, the price hovered in the $63,900 to $64,000 range.

Meanwhile, the S&P 500 gained between 4.6% and 4.8% over those same three months. The index touched an intraday all-time high of 7,793 and closed near 7,753 on August 11.

Zoom out further and the picture gets worse for Bitcoin. Over the past year, the asset has declined approximately 46% from its peak near $119,000. The S&P 500, by contrast, has posted gains exceeding 20% across various measurement windows during the same period.

Rolling 30-day correlation between Bitcoin and the S&P 500 has remained elevated in recent months, often ranging from 0.5 to 0.74. High correlation typically means Bitcoin moves in the same direction as equities. But right now, stocks are going up and Bitcoin is going down, which suggests something specific to crypto is dragging the price lower even as the broader macro environment supports risk-taking.

What’s driving the split

The source data from Glassnode points to an equity-led market environment with weak tech and growth dynamics. Bitcoin has historically traded more like a high-beta tech asset than digital gold. When growth stocks lead, Bitcoin usually follows. When they don’t, Bitcoin tends to get left behind.

In late 2022, Bitcoin diverged from equities during a period of crypto-specific contagion. The current divergence is happening without an obvious industry crisis. No major exchange has collapsed. No stablecoin has depegged. The selling pressure appears more structural than event-driven.

What this means for portfolios and sentiment

Bitcoin is correlated to equities but underperforming them. It’s declining during a period of stable inflation expectations and losing value while the S&P 500 holds firm or advances.

The 2022 crash took Bitcoin below $16,000, and it more than quintupled from those lows. Investors who bought anywhere near the $119,000 peak are sitting on losses that rival the worst drawdowns in crypto history by dollar magnitude.

Traders monitoring the correlation data should watch for a sustained break in the 0.5 to 0.74 range. A drop in correlation combined with continued equity strength would suggest that Bitcoin is decoupling on the downside. Conversely, a snap-back in correlation with stocks still rising could offer Bitcoin a path higher, though nothing in the current data suggests that’s imminent.

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