Bitcoin may no longer be moving in lockstep with the S&P 500 over a short time frame, but that does not mean it has escaped the broader risk-off regime. In Axel Adler Jr.’s latest morning brief, the more important signal is not the breakdown in short-term correlation, but Bitcoin’s continued relative weakness against US equities.
Bitcoin Weakens Against The S&P 500
Adler’s argument rests on two charts that, taken together, push back on the increasingly familiar claim that a lower BTC-equity correlation automatically points to decoupling. The first is the 13-week BTC-S&P correlation, which has recently turned negative and stayed below zero. On the surface, that could look constructive for Bitcoin. But Adler argues that the reading is easy to misinterpret.
“The 13-week correlation measures how closely the weekly returns of BTC and the S&P 500 have moved together over a short window,” he wrote. “Over recent weeks, the short-term correlation has turned negative and has been holding below zero. At first glance this might look like a loosening of the link between BTC and equities – but in practice it more likely reflects the choppy nature of recent weeks, where isolated Bitcoin bounces have alternated with continued weakness in the index.”
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That distinction is central to the note. A falling or negative correlation only says that the two assets are no longer moving neatly together over that window. It does not say Bitcoin is strong. It does not say capital is treating BTC as a defensive asset. And it does not confirm that the market has begun to price Bitcoin independently of the same macro pressures hitting equities.
For that, Adler points to the second chart: the BTC/S&P price ratio. This is where the case for decoupling breaks down. The ratio, which tracks Bitcoin’s performance relative to the S&P 500, has declined since the start of the year and remains under pressure. In practical terms, that means Bitcoin has been underperforming stocks even during periods when the short-term correlation has weakened.
“What matters to the market here is not the fact of negative correlation per se, but whether it is accompanied by sustained BTC outperformance over the S&P,” Adler wrote. “That confirmation is not there yet, so it is too early to talk about Bitcoin achieving genuine independence from the risk-off regime.”
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That framing matters because it shifts the focus away from a single statistical measure and back toward market behavior. If Bitcoin were truly decoupling, the relative-strength picture would likely be improving. Instead, Adler argues, the market is still assigning Bitcoin the role of a higher-beta risk asset, one with “higher risk and a larger drawdown amplitude” than the index.
He makes the point even more explicitly in the note’s conclusion. “The market is currently sending an uncomfortable but fairly honest signal,” Adler wrote. “The S&P 500 continues to decline, and BTC is not merely staying vulnerable to external risk-off pressure – it continues to underperform the index in relative terms. The prevailing regime remains risk-off.”
In that framework, the more useful trigger to watch is not whether correlation stays negative for another week, but whether the BTC/S&P ratio can reverse and hold higher. Adler says only “a new stable regime” of relative outperformance would support a real decoupling thesis. Until then, the market message remains straightforward: the relationship between Bitcoin and equities may have become less linear, but not less risk-sensitive.
At press time, BTC traded at $66,652.
Featured image created with DALL.E, chart from TradingView.com
