Bitcoin is trading at $74,683, up 0.71% in 24 hours, while the US Spot Bitcoin ETF recorded net inflows of $411.5 million on April 15, one of the strongest single-day inflows in recent weeks. But a more interesting story is unfolding in the charts.
Analyst Michael Van de Poppe said the correlation between Bitcoin and Nasdaq, which has historically ranged from 0.40 to 0.85 depending on market conditions, has collapsed to -0.20 over the past two quarters.
This is the weakest correlation between the two assets in the past decade. “At this time of year? This is the weakest correlation in the last 10 years,” Van de Poppe wrote. “This is a huge opportunity for Bitcoin.”
Two interpretations, one more likely
Van de Poppe described two ways to read the divergence. Either the Nasdaq is lagging behind Bitcoin or a big correction in stock prices is still coming. Or maybe Nasdaq is Bitcoin’s front runner, and Bitcoin is an asset that is just now catching up.
But now, while the S&P 500 and Nasdaq are both nearing all-time highs, Bitcoin remains at an historic low. Therefore, Poppe’s second point fits the scenario.
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Bitcoin’s current valuation relative to gold is at its lowest level in history from a Sigma perspective, with Van de Poppe describing the metric as a generational buying opportunity.
What the long-term chart shows
Overlaying Bitcoin’s price history against the Nasdaq dating back to 2017, the two assets have moved broadly in tandem through multiple cycles, becoming more correlated during the 2021-2022 period and remaining elevated through most of the period since.
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Current divergence is visually noticeable. Bitcoin’s blue forecast line on the chart indicates that it is positioned at a significant discount to its historical trajectory and current position, where correlation suggests it should trade near historical highs relative to the stock market.
What history tells us about returns after a crash
Van de Poppe added a third layer to his argument. Looking at previous periods when Bitcoin experienced similar-sized crashes, the average price after three months was up 45%. After 12 months, the average return increased by 370%.
“It’s the perfect time to buy Bitcoin,” he wrote.
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