Bitcoin Stuck in Range as Crypto Market Diverges from Risk Assets
The cryptocurrency market has continued its trend of diverging from traditional risk assets. Despite US equities reaching all-time highs, major cryptocurrencies like Bitcoin and Ether remain largely flat, hovering around $64,000 and $1,800 respectively.
This disconnect is becoming increasingly pronounced since the Iran conflict began in late February. Unlike previous market cycles, Bitcoin has failed to mirror gains in US equities and has instead attracted limited safe-haven demand.
A correlation matrix highlights this shift, showing that Bitcoin's relationship with the US100 and US500 indices has weakened over the past six months. In contrast, its correlation with gold has remained strong at +0.64, indicating that geopolitical uncertainty and crypto-specific factors have exerted a greater influence on price action.
The market is also facing various headwinds, including muted ETF flows, regulatory uncertainty, and ongoing security concerns. The CLARITY Act, a key market-structure bill, has stalled in the Senate due to ethics provisions linked to President Trump's crypto interests.