MarketsShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailBitcoin and software stocks are breaking up — and history says a major crypto move is coming
Bitcoin and software stocks have diverged significantly after a long period of correlation, raising questions about bitcoin's potential future performance.
By James Van Straten|Edited by Jamie Crawley Jun 1, 2026, 10:02 a.m. 2 min readMake preferred on
BTCUSD/IGV (TradingView)Key Insights:
- Since April 10, the iShares Expanded Tech-Software Sector ETF (IGV) has surged by 36% and regained its 200-day moving average, indicating a return to a long-term upward trend despite prior concerns about AI's impact on traditional software companies.
- Bitcoin's 20-day rolling correlation with IGV has dropped to 0.58, a level last observed before significant bitcoin rallies in late 2023 and mid-2024.
- Historically, instances of similarly low correlation have been followed by substantial bitcoin gains in the months to come.
For most of the past five years, Bitcoin BTC$72,651.09 and software stocks have moved in tandem, with Bitcoin viewed as a high-beta tech asset.
The iShares Expanded Tech-Software Sector ETF (IGV) has been a strong indicator of the software sector's performance. However, this correlation seems to be breaking down.
Since May 14, a notable divergence has occurred, with IGV climbing approximately 12% while Bitcoin has experienced a decline of around 10%, representing one of the largest gaps between the two in recent memory.
Both Bitcoin and IGV reached record highs in October 2025 but subsequently faced significant pullbacks, with Bitcoin dropping nearly 50% and IGV about 37%. Concerns over AI disrupting classic software business models led to the software sector's downturn. The narrative of a "SaaS apocalypse" gained traction, resulting in widespread selling of software stocks like Oracle (ORCL), Microsoft (MSFT), and Palantir (PLTR).
Since early April, IGV has rebounded strongly, rising 36% and surpassing its 200-day moving average, which is a significant technical indicator reflecting the average closing price over the last 200 trading days and is often used to assess long-term trends. As of Friday, IGV closed near 98 and was trading around 104 in pre-market trading on Monday.
In contrast, Bitcoin is trading close to $73,000, which is approximately 10% below its 200-day moving average of $79,388.
Currently, the 20-day rolling correlation between Bitcoin and IGV stands at 0.58. The last notable instances of such low correlation were in October 2023 when Bitcoin was priced at approximately $25,000 before it surged to $70,000 over the subsequent six months, and again during the summer of 2024, right before Bitcoin climbed towards $100,000 following President Trump's election victory.
Historically, these phases of low correlation do not persist for long. Bitcoin typically either rebounds to align with software stocks, or IGV's recovery turns out to be temporary. Presently, the latter seems less probable given IGV's robust momentum and its rebound past the 200-day moving average.
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