After much talk in recent years about an increasing correlation between stocks and bitcoin (BTC), a ‘decoupling’ between the two has been observed in May, as BTC has fallen significantly more than stocks. But according to an observer, bitcoin could find support as soon as the stock market closes for the week.
The so-called decoupling between bitcoin and stocks – most importantly the US S&P 500 index – has come into focus this month, with BTC falling close to 25% and the S&P 500 down just over 2% since the beginning of May.
Bitcoin (blue line) versus S&P 500 (orange line) in April and May:
Not surprisingly, the bearish moves in bitcoin and the broader crypto market compared to stocks have been noticed by members of the crypto community as well. Among those who have commented on it, several pointed to fund redemptions in the wake of the Terra (LUNA) collapse on May 9 as an important reason.
The decoupling between crypto and stocks is “probably driven by fund redemptions,”...
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