The price of Bitcoin had a mixed performance over the past week, growing to a new all-time high at some point before stabilizing around the $105,000 mark. While price action may have been somewhat sluggish over the past week, there is growing positive sentiment surrounding the premier cryptocurrency – something that has been lacking in the first two weeks of 2025.
This recent spurt of time has seen the world’s largest cryptocurrency by market cap continue Spread your wings in the global financial markets. Interestingly, recent data shows that the correlation between the Bitcoin price and the US stock market has reached a new high.
What does growing correlation mean for BTC and investors?
In a QuickTake post on the Cryptoquant platform, an analyst with the Pseudonym DarkFost revealed that the Bitcoin price has remained closely tied to the US stock market. According to data from Cryptoquant, the correlation between the BTC price and the NASDAQ index reached a new all-time high on Saturday, January 25.
For clarity, the NASDAQ Composite is a stock market index that tracks the value of nearly all stocks listed on the NASDAQ stock exchange. Along with the S&P 500 and the Dow Jones Industrial Average, the NASDAQ ranks as one of the most popular stock market indexes in the United States.
Source: CryptoQuant
DarkFost highlighted that the bitcoin price and The NASDAQ index showed a historically strong correlation in 2024 and continued this trend in the new year. Similarly, the price of BTC and the S&P 500 index have been closely tied over the past year, although there have been brief periods of decoupling.
According to the QuickTake analyst, the rising correlation suggests that institutional players are now more open to BTC as an asset class and aligning their performance with the traditional market trends.
DarkFost added:
With Trump now in charge, expectations of eased regulations, such as the repeal of SAB 121, could further strengthen Bitcoin’s position as a recognized asset class among institutional investors, potentially accelerating its adoption.
The relationship between Bitcoin and US stock markets has always been interesting, as they provide different investment opportunities. However, a strong correlation between these two asset classes is considered to reduce the diversification opportunities they often offer investors.
Bitcoin price
As of this writing, BTC’s price is at around $104,900, reflecting no significant price movement over the past 24 hours.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured Image created by Dall.e, charts from TradingView
