Bitcoin’s S&P Correlation is not a bullish sign

A negative BTC-S&P correlation does not mean that Bitcoin is gaining strength; it may show its one bounce that coincides with the weakness of the Index.

Bitcoin’s short-term correlation with the S&P 500 has turned negative recently, but on-chain analyst Axel Adler Jr. warned in his March 31 Morning Brief that this is not the bullish signal it may appear to be.

The most telling metric, the BTC/S&P price ratio, has fallen since the start of the year and continues to show that Bitcoin is not performing well on par, not apart from it.

Weak Relative Strength Keeping Bitcoin Tied to Equity Market Pressure

Adler’s analysis focuses on two metrics that together paint a complete picture of where Bitcoin sits in the current market. The first is the 13-week BTC-S&P correlation, which measures how close the weekly returns of the two assets are over a short window. That reading has recently been negative, meaning the two assets have been slow to sync up.

In terms of virtual value, this may suggest that Bitcoin is starting to trade independently of dividends. Adler pushes back against that interpretation. According to him, the falling correlation only means that the synchronization of the price movement has become less pure, not that Bitcoin is gaining strength. A single bounce in the BTC exchange and continued weakness in the S&P could produce negative correlation readings without the cryptocurrency outperforming stocks.

The second metric is the BTC/S&P price ratio, which is a more accurate measure of relative performance. A rising ratio means that Bitcoin is outperforming the index, while a falling ratio means the opposite. According to Adler’s assessment, as of January 2026, that rate has dropped significantly and has been under pressure in recent weeks. The analyst said it means that even in times of temporary correlation collapse, BTC has not turned into a safe haven or the posting of sustainable gains relative to equities.

His conclusion was that the market is still pricing Bitcoin as a high-risk asset with greater downward potential than the S&P 500. He also talked about what the real split will look like, with a trigger, according to him, not a reading of the correlation but a continuous change in the opposite direction of the price of BTC/S&P that can hold as just one stable week, not just a new stable system. Adler says that at the moment, that confirmation does not exist.

Value Action and Macro Backdrop

Bitcoin touched a monthly low below $65,000 earlier this week before recovering to surpass $68,000. There, it was rejected as the new development in the US-Iran conflict had ideological weight.

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At the time of writing, the stock was trading near $67,000, down 1.4% in the last 24 hours and about 6.5% in the last week. The worst performance was within 14 days, with BTC losing almost 10 percent of its value, while within 30 days, it was completely different, as it remained almost flat, only 0.3% in the red.

The country’s background has added a layer of uncertainty that is difficult to match, as oil prices have risen by almost 50% since late February, driven by third-party fears associated with disruptions in the Strait of Hormuz. Adler’s analysis suggests that Bitcoin is unlikely to escape the same gravity, regardless of what short-term correlation readings indicate, as long as the S&P 500 remains under pressure.