Recently, Bitcoin’s short-term relationship with the S&P 500 has shifted to a negative correlation. However, on-chain analyst Axel Adler Jr. cautioned in his March 31 Morning Brief that this development may not be as optimistic as it seems.
A more significant indicator, the $BTC/S&P price ratio, has been on a downward trend since the beginning of the year. This suggests that Bitcoin is lagging behind equities rather than breaking free from their influence.
Weak Relative Strength Keeping Bitcoin Tied to Equity Market Pressure
Adler’s insights focus on two key metrics that together provide a clearer understanding of Bitcoin’s position in today’s market landscape. The first metric is the 13-week $BTC-S&P correlation, which evaluates how closely aligned the weekly returns of both assets have been over a brief period. Recently, this figure turned negative, indicating less synchronized movement between these two assets.
This shift might initially imply that Bitcoin is beginning to trade independently from equities; however, Adler challenges this interpretation. He argues that a declining correlation merely indicates less consistent price movements and does not signify any newfound strength for Bitcoin. Isolated surges in $BTC, juxtaposed with ongoing weakness in the S&P index can create a negative correlation without suggesting superior performance by cryptocurrency compared to stocks.
The second important metric is the $BTC/S&P price ratio—this serves as a more straightforward gauge of relative performance. An increasing ratio indicates that Bitcoin outperforms its index counterpart while a decreasing one signifies underperformance. According to Adler’s analysis since January 2026 (note: likely an error and should be January 2023), this ratio has noticeably declined and faced pressure recently. He notes that even during periods when short-term correlations weakened, $BTC did not emerge as a safe haven asset or demonstrate sustained gains compared to equities.
His conclusion emphasizes that market sentiment still views Bitcoin as higher-risk with greater potential for drawdowns than those associated with S&P 500 investments. Furthermore, he elaborated on what true decoupling would entail—not just changes in correlation readings but rather an enduring upward shift in the $BTC/S&P price ratio establishing itself within new stable parameters over time instead of fleeting trends observed over single weeks—something currently absent according to Adler.
Price Action and Macro Backdrop
This week saw Bitcoin dip close to $65K before bouncing back above $68K only later facing rejection due largely due developments concerning US-Iran relations impacting overall market sentiment.
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As of now writing this article ,the asset trades around$67K,a declineof1 .4 %overthe last24 hoursandabout6 .5 %for th epast week.The worstshowingoccurredover14 dayswith$ BTC losing nearly10%ofitsvaluewhilein30daysitwasalmostflatwithonly0 .3 %inthered.
The geopolitical climate adds layersofuncertaintythat are challengingtoassess.Oil priceshave surgedaround50%since lateFebruarydue tosupply fearsrelatedto disruptionsintheStraitofHormuz.AdlersuggeststhatBitcoinwilllikelyremainunderthesamegravitationalpullaslongastheS& P500isstillstrugglingregardlessofthecurrentshorttermcorrelationreadings.