Bitcoin's correlation with stocks has hit a historic low, as analysts predict a potential recovery tied to future interest rate cuts.
Recent analysis from Santiment indicates that Bitcoin and altcoins must begin to operate independently from traditional financial markets to achieve significant growth.
📊 Historically, Bitcoin has closely tracked the S&P 500, particularly during periods of economic growth and low interest rates. However, as interest rates increased, Bitcoin's performance mirrored that of the stock market.
— Santiment (@santimentfeed) February 24, 2026
Traditionally, Bitcoin's movements were aligned with the S&P 500, with asset values rising during low interest rates and falling when the Federal Reserve raised rates. However, this correlation has weakened significantly in recent months. Since late August, Bitcoin has seen a dramatic decline of 43%, while gold has surged by 51% and the S&P 500 has only increased by 7%. This marks the weakest relationship between these assets since the market crisis of November 2022.
Despite Bitcoin's continued downturn, traditional markets have remained relatively stable. Analysts believe this decoupling is a temporary situation caused by capital outflows and expect Bitcoin to eventually realign with stock trends.
Looking ahead, analysts forecast three potential cuts to the Federal Reserve's key interest rate in the latter half of 2026. This anticipated easing of monetary policy could create favorable conditions for Bitcoin's resurgence, allowing it to catch up with stock indices.
MVRV Metric Insights
Glassnode analyst Chris Beamish pointed out that the MVRV ratio is normalizing, indicating that cryptocurrency valuations are returning to historically advantageous risk-reward levels. However, Bitcoin has not yet entered a state of deep undervaluation.
$BTC MVRV has returned closer to its long-term average, with previous extremes now reset. Current valuations are nearing levels historically associated with better risk-reward, but they still fall short of deep undervaluation. https://t.co/UMCgOJKwZQ February 24, 2026
The realized capitalization of Bitcoin has decreased from a peak of $1.12 trillion in November to $1.09 trillion, reflecting a 2.26% drop in the past month due to ongoing capital outflows.
Researcher Axel Adler Jr. noted that 25.9% of Bitcoin’s supply consists of coins that have been inactive for three to six months, most of which were bought at previous price highs and are currently at a loss.
Adler described the market's current state as "neutral-defensive," indicating that while investors are avoiding mass sell-offs, there is also a lack of new capital influx to stimulate price increases.
On February 24, Matrixport analysts highlighted a significant barrier to Bitcoin’s recovery.
