Bitcoin fell to its lowest level in almost two months on Tuesday as cryptocurrencies continue to diverge from traditional equity markets.
Bitcoin (BTC) fell to a low of $70,023 on Coinbase early on Tuesday, its lowest level since April 7, marking a daily decline of more than 4% and a weekly loss of 8%, according to TradingView. Bitcoin is down 44% from its October peak of $126,000.
US stock markets such as the S&P 500 have meanwhile hit a record high of just over 7,600 points on Monday, while the tech-heavy Nasdaq peaked at over 27,000 points.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, told Cointelegraph that some analysts have noted that Bitcoin is the only major asset in contraction right now, and the divergence is notable.
“It shows Bitcoin is trading more like a high-beta risk asset tied to macro sentiment rather than an independent hedge,” he added.
“This gap highlights current weakness, but it also sets up potential for stronger relative performance once macro conditions improve. I view it as a temporary phase in the cycle, not a permanent shift.”
Analytics platform Santiment said on Monday that “the gap between traditional equities and crypto has become increasingly difficult for traders to ignore.”
“This divergence has led to a growing preference among investors for stocks over alternative assets like Bitcoin and altcoins,” it added.
Crypto and equity divergence widens. Source: Santiment
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Santiment said the performance gap between sectors can create a “self-reinforcing cycle,” and when traders see equities consistently generating better returns with lower volatility, “capital often rotates away from crypto and into stock markets.”
However, Santiment said that this pattern won’t last forever, and “mainstream influencers” discussing stock dominance over crypto is often a good sign that the crowd is leaning too far into the “equity FOMO and crypto FUD.” Markets generally move opposite to the majority of traders’ expectations, it added.
Bitcoin is approaching a major long-term resistance level at the 200-week exponential moving average (EMA), which is currently around the $69,000 price zone.
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