Bitcoin About to Follow Nasdaq Higher?

• Bitcoin Nasdaq correlation collapses to negative 0.20, its weakest reading in a decade.
• Nasdaq approaches all-time highs while Bitcoin sits at a historically low gold valuation.
• Bitcoin averaged 45% gains three months after previous collapses of similar magnitude.

Bitcoin is trading at $74,683, up 0.71% in 24 hours, while US spot Bitcoin ETFs recorded $411.5 million in net inflows on April 15, one of the strongest single-day flow figures in recent weeks. But the more interesting story is playing out in the charts.

Analyst Michaël van de Poppe said that Bitcoin’s correlation with the Nasdaq, which has historically ranged between 0.40 and 0.85 depending on the market environment, has collapsed to negative 0.20 over the past two quarters.

That is the weakest correlation between the two assets in the past decade. “This period? The weakest correlation in the past 10 years,” van de Poppe wrote. “That provides a tremendous opportunity for Bitcoin.”

Two Interpretations, One More Likely

Van de Poppe laid out the two ways to read the divergence. Either the Nasdaq is lagging behind Bitcoin, or a major correction in equities is still coming. Or the Nasdaq is frontrunning Bitcoin, and Bitcoin is now the asset about to catch up.

However, currently, both the S&P 500 and Nasdaq are approaching all-time highs while Bitcoin remains historically weak. Hence, Poppe’s second point fits the scenario. 

Source: CryptoChartWatch

Bitcoin’s current valuation relative to gold sits at its lowest level in sigma terms historically, a metric van de Poppe describes as a generational buying opportunity.

What the Long-Term Chart Shows

Overlaying Bitcoin’s price history against the Nasdaq going back to 2017, the two assets have moved broadly in tandem through multiple cycles, with the correlation tightening during the 2021 to 2022 period and remaining elevated through most of what followed.

Source: X

The current divergence stands out visually. Bitcoin’s blue projection line on the chart shows the historical path and the current position sitting at a significant discount to where the correlation relationship would imply it should be trading relative to equity markets near all-time highs.

What History Says About Post-Crash Returns

Van de Poppe added a third layer to his argument. Looking at previous periods where Bitcoin experienced a collapse of similar magnitude, the average price three months later was up 45%. Twelve months later, the average return was up 370%.

“The best time to buy Bitcoin,” he wrote.

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