Bitcoin-Nasdaq Link at Peak, Historically Preceding 20% Market Drops

The correlation between Bitcoin proxy BlackRock IBIT and the Nasdaq is nearing 70%, which suggests that a divergence in their performance may occur soon, according to historical trends.

The data from Singapore-based blockchain firm Matrixport reveals that Bitcoin's (BTC) correlation with the Nasdaq is approaching a level that has only been reached twice before, right before the BTC price dropped by 20%.

📊Today’s #Matrixport Daily Chart – March 25 2025 🔽

Bitcoin-Nasdaq Correlation Hits Extreme: Divergence Likely Ahead

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According to a recent post by Matrixport, the 30-day realized correlation between Bitcoin proxy IBIT and the Nasdaq can be attributed to factors such 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

However, Matrixport warns that such high correlations are usually short-lived, indicating that a divergence in performance between Bitcoin and the Nasdaq may be imminent. "Such high correlations have historically been short-lived, suggesting that a divergence in performance between Bitcoin and the Nasdaq may be on the horizon," Matrixport stated. 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 current correlation trend could indicate that Bitcoin may decouple from the Nasdaq's influence soon, there is still no clear timeline or certainty that such a divergence will occur.

In the meantime, spot Bitcoin exchange-traded funds (ETFs) have 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. In a March 23 report, Markus Thielen of 10x Research noted that Bitcoin's reversal indicators have turned bullish, with the 21-day moving average now at $85,200.