Negative Bitcoin–Nasdaq Correlation Persists; History Points to Potential BTC Bottom
Bitcoin has entered an extended negative 20-day correlation with the Nasdaq 100 (current coefficient ~-0.43), marking the fourth such episode in five years. Past occurrences — May 2021 (China mining ban), July 2021/yen-carry unwind, September 2023 and August 2024 — coincided with meaningful BTC local lows ($30k in 2021, ~$49k after the yen unwind, sub-$30k in 2023 and lows in 2024), after which bitcoin recovered materially. Since its October all-time high, bitcoin is down about 27% and briefly fell as much as 36%; by contrast the Nasdaq 100’s maximum drawdown has been ~8% and it sits roughly 2% below its record high. The divergence suggests bitcoin is decoupling from broader tech risk assets — a pattern that historically signaled a bottom for BTC, though timing and certainty of a rebound remain unclear. Key metrics: 20-day correlation ≈ -0.43; BTC ~27% below ATH; Nasdaq 100 ~2% below record; prior negative-correlation bottoms: 2021, 2023, 2024. Traders should watch correlation trends, BTC price vs. prior local lows, and tech-sector breadth to gauge potential entry points.
Neutral
The article signals a historically bullish structural indicator for bitcoin — repeated episodes where a negative 20-day correlation with the Nasdaq 100 coincided with BTC local lows and subsequent recoveries. That pattern increases the probability of a near-term bottom forming. However, the signal is not an immediate buy trigger: timing remains uncertain and bitcoin has shown larger drawdowns (up to 36%) versus the Nasdaq (≈8%), indicating higher volatility and risk. Short-term implications: elevated volatility and potential short squeezes or snap recoveries if correlation reverts; traders should use tight risk management and consider staggered entries or option strategies to play a mean-reversion. Long-term implications: if the negative correlation marks capitulation similar to 2021/2023/2024, larger buyers and institutional flows could support a sustained recovery. Monitor: 20-day correlation trend, BTC key support levels (prior local lows), ETF flows and macro/tech risk sentiment. Given historical precedents this is cautiously constructive for BTC but not unambiguously bullish — hence a neutral classification.