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S&P 500 correlation hits 60 per cent while Bitcoin tests critical support

S&P 500 correlation hits 60 per cent while Bitcoin tests critical support

The crypto market declined 0.65 per cent over the past 24 hours, bringing its total valuation to US$2.22 trillion. Bitcoin led the downturn as institutional sellers aggressively exited positions. Data shows a strong 60 per cent correlation with the S&P 500, indicating a shared macro-driven move across asset classes. Investors observe this connection to understand how traditional finance influences digital assets. Bitcoin’s dominance currently sits at 57.88 per cent, highlighting its role as the market leader.

The core driver remains continued institutional distribution as large holders reduce exposure. This shift means capital leaves the ecosystem at a significant rate. The primary reason for this drop involves sustained institutional outflows from the United States of spot Bitcoin exchange-traded funds. SEC filings revealed net selling of these shares, equivalent to roughly 25,000 BTC, in the fourth quarter of 2025. This unwinding of institutional positions creates persistent sell pressure that weighs heavily on prices. Capital exits the regulated gateway for institutional crypto exposure, undermining a key pillar of recent market support. Traders watch daily ETF flow data closely because a consecutive string of net inflows would stabilise Bitcoin and the broader market.

The secondary reasons for the decline include spillover from a risk-off move in tech equities and persistently negative market sentiment. Readings reflect extreme fear in the market with the Fear and Greed Index at 11. This low number suggests investors feel panic rather than opportunity. Crypto moves with traditional risk assets and does not decouple during these periods. A sell-off in tech stocks contributed to the risk-off environment, and uncertainty around AI advancements, such as the Anthropic Claude launch, fuelled this sentiment. This sentiment compounds the extreme fear in crypto and amplifies the downturn.

Negative macro sentiment and equity weakness work together to push values lower. Investors should watch for stabilisation in major tech indices such as QQQ and SPY as a precursor to relief in crypto. Sentiment shifted from AI disruption fears to AI opportunity after the AMD Meta deal. Battered software stocks also stabilised as investors reconsidered the immediate threat of AI replacing existing enterprise systems. This stabilisation in tech could help crypto if the correlation holds true.

The near-term market outlook depends on Bitcoin defending the US$2.17 trillion total market cap, which marks the yearly low. The Relative Strength Index at 36.96 suggests the market is approaching oversold territory but has not yet reached it. A break below US$2.17 trillion could trigger another leg down toward the 200-day moving average near US$3.07 trillion, according to the provided technical analysis. Conversely, a hold above support combined with a return of positive ETF flows could set the stage for a technical bounce.

The key trigger to watch involves the release of daily United States Bitcoin ETF flow data. A reversal hinges on sustained positive ETF net flows. Without this change, the bearish pressure will likely continue. The downturn fuels itself through institutional capital rotation out of Bitcoin ETFs, and correlated weakness in tech stocks exacerbates the pressure. Technical indicators show the market becomes oversold, but a definitive bottom requires a shift in institutional behaviour.

Broader economic factors also play a critical role in shaping this landscape. Policy uncertainty emerged as a new 10 per cent global United States tariff came into effect on 24 February. Markets appeared to have largely priced in the impact following recent Supreme Court rulings. Consumer confidence supports the S&P 500 after the Consumer Confidence Index rose to 91.2 in February. This number beat economist predictions of 87.4 and provides some stability to equities.

Energy and geopolitics influence the picture as crude oil prices eased by approximately one per cent. Iran indicated readiness to negotiate ahead of nuclear talks scheduled for Thursday. Brent futures settled at US$70.77 per barrel, which helps reduce inflationary fears slightly. Commodities and Treasury yields show mixed signals that affect risk appetite. Gold prices pulled back slightly on 24 February to approximately US$5,150 per ounce as profit-taking occurred after Monday’s record-setting rally. Indian-based prices for 24K gold reached a new high of ₹1.62 lakh per 10 grams on 25 February, driven by continued safe-haven demand. This divergence shows that investors are seeking safety in physical assets as trading volumes adjust in Western markets.

Treasuries indicate steady yield expectations, as the benchmark 10-year United States Treasury yield held near 4.04 per cent. The two-year yield ticked up slightly to 3.459 per cent, which signals short-term rate expectations remain firm. Currency markets show the United States Dollar firmed while the Japanese Yen weakened. The USD/JPY pair pulled above 155.25, reflecting strength in the greenback against major peers.

A strong dollar often pressures risk assets like crypto because it reduces the appeal of non-yielding investments. Sentiment shifted from AI disruption fears to AI opportunity after the AMD Meta deal. Battered software stocks also stabilised as investors reconsidered the immediate threat of AI replacing existing enterprise systems. This stabilisation in tech could benefit crypto if the correlation holds. The business landscape evolves rapidly, and these shifts matter for digital asset valuations. Investors must weigh the tariff impacts against the gains in consumer confidence. The interplay between oil prices and gold demand shows a complex global picture.

Market outlook remains bearish under current conditions. Only a sustained shift in the above-mentioned areas will reverse the current trend. The market waits for clarity on institutional intent and macro stability. Until then, the pressure remains on the downside.

 

Source: https://e27.co/sp-500-correlation-hits-60-per-cent-while-bitcoin-tests-critical-support-20260225/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Dow hits record high, Nasdaq tumbles 0.6 per cent, Bitcoin miners flee: Signals deeper stress than price alone

Dow hits record high, Nasdaq tumbles 0.6 per cent, Bitcoin miners flee: Signals deeper stress than price alone

Investors processed unexpectedly soft retail sales data that simultaneously lifted hopes for Federal Reserve easing while exposing fragility across multiple asset classes. The Dow Jones Industrial Average managed a modest 0.1 per cent gain to establish a new record closing high. This narrow advance masked broader weakness as the S&P 500 declined 0.34 per cent to 6,941.33 and the Nasdaq Composite fell 0.6 per cent to 23,099.18. This divergence reflected a rotation away from technology and growth-oriented assets toward more defensive industrial names.

The fundamental catalyst, December retail sales, suggested a concerning loss of consumer momentum. Core sales dipped 0.1 per cent, contrary to expectations of expansion. This signalled that household spending power may have peaked by the end of 2025, with potential implications for fourth-quarter GDP growth calculations.

The bond market reacted decisively to the economic softening, with Treasury yields dropping sharply. The 10-year yield fell to approximately 4.14 per cent, its lowest level in a month. This move underscored how quickly market participants recalibrated their expectations for monetary policy. Money markets now price in elevated probabilities for three interest rate cuts during 2026. Federal Reserve officials, including Cleveland President Beth Hammack, emphasised that there is no immediate urgency for policy adjustments. This tension between market pricing and central bank communication created an undercurrent of uncertainty that permeated risk assets throughout the session.

Gold capitalised on the lower-yield environment, surging to consolidate above the psychologically significant US$5,000 per ounce threshold. Its non-yielding appeal has strengthened relative to fixed-income alternatives. WTI crude oil held steady near US$64.20 per barrel. Diplomatic developments in US-Iran negotiations supported prices by tempering fears of supply disruptions.

A noteworthy disruption emerged in the financial services sector, with shares of Charles Schwab and LPL Financial plummeting by at least seven per cent. Altruist Corp launched an AI-driven tax strategy tool, triggering broader anxiety about technological displacement across wealth management. This industry had long been considered relatively insulated from automation.

The severity of the reaction suggested investors recognised this as more than a niche competitive threat. It represented a potential inflection point for an entire professional services category. Global markets displayed their own complexities with Asian equities reaching an all-time high earlier in the trading day. South Korean strength led these gains, though Treasury trading remained subdued due to a Japanese market holiday. This limited cross-market feedback loops during a pivotal session.

The cryptocurrency market reflected these macro crosscurrents, declining 2.03 per cent to a total valuation of $2.35 trillion over the preceding 24 hours. This move exhibited a moderate 50 per cent correlation with the S&P 500. Digital assets increasingly moved in tandem with traditional risk sentiment rather than operating as an independent store of value. Beneath this surface correlation lay crypto-specific stressors of alarming magnitude. Bitcoin mining difficulty experienced its largest downward adjustment since 2021.

This signalled widespread miner capitulation as operational unprofitability forced network participants to shut down equipment. The exodus created direct selling pressure while simultaneously undermining confidence in the ecosystem’s foundational security layer. When those responsible for transaction validation and network integrity face existential financial pressure, the implications extend far beyond immediate price action.

Compounding this structural weakness, institutional capital continued its retreat from regulated Bitcoin exposure. Spot ETF assets under management contracted by US$13.6 billion within a single week, falling from US$110.92 billion to US$97.31 billion. This outflow represented a reversal of one of the primary drivers behind the previous bull market cycle. Derivatives markets experienced a violent deleveraging event, with open interest dropping 9.76 per cent in 24 hours.

Funding rates turned negative, triggering forced liquidations of overextended long positions. The convergence of miner distress, institutional withdrawal, and speculative unwinding created a self-reinforcing negative feedback loop. Each element amplified the others, producing cascading selling pressure across the digital asset landscape.

Technical indicators suggested the market was approaching an inflection point, with Bitcoin’s relative strength index plunging to 24.33. This indicated an oversold condition that historically precedes short-term bounces. The critical threshold rested at US$68,000, where a successful defence could catalyse a relief rally toward US$70,500.

A breakdown below this support level threatened to extend the downtrend significantly. The path forward depended on two key variables. ETF flows needed to reverse before additional miner selling emerged. The outcome of White House stablecoin legislation talks also mattered, with a policy deadline approaching at the end of February 2026. Regulatory clarity around stablecoin yields might provide the catalyst needed to restore institutional confidence, though timing remained uncertain.

The day ultimately revealed markets operating at an inflection point, with traditional and digital asset classes moving in concert yet retaining distinct vulnerability profiles. Traditional markets grappled with the contradiction between softening economic data and still hawkish central bank rhetoric. Crypto markets faced acute structural pressures at their operational core. The miner capitulation represented more than a price catalyst. It signalled stress at the very foundation of blockchain security models.

This moment of fragility also contained the seeds of potential renewal. Network difficulty adjustments have historically preceded major cycle bottoms by forcing inefficient participants out of the ecosystem. The coming weeks would test whether coordinated policy responses and technological adaptation could stabilise these interconnected markets.

Deeper recalibration might remain necessary before sustainable growth could resume. Investors now faced the challenge of distinguishing between temporary volatility and fundamental regime shifts across both traditional finance and its emerging digital counterpart.

The interplay among macroeconomic data points, technological disruption, and network-level stressors created a multifaceted environment that demands nuanced analysis rather than simplistic narratives. Market participants who recognised these layered dynamics stood better positioned to navigate the uncertain terrain ahead.

 

Source: https://e27.co/dow-hits-record-high-nasdaq-tumbles-0-6-per-cent-bitcoin-miners-flee-signals-deeper-stress-than-price-alone-20260211/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Gold jumps 6.1 per cent to US$4,946 as geopolitical tensions override dollar weakness: What about Bitcoin?

Gold jumps 6.1 per cent to US$4,946 as geopolitical tensions override dollar weakness: What about Bitcoin?

Investors grew cautious about artificial intelligence potentially creating fiercer competition within the software sector, which kept sentiment fragile even as the partial United States government shutdown concluded late Tuesday after President Trump signed a funding agreement negotiated with Senate Democrats.

Meanwhile, the Reserve Bank of Australia made a decisive move by raising its key interest rate to 3.85 per cent from 3.60 per cent, marking the first major economy to tighten monetary policy this year after determining that inflation pressures remained stubborn enough to require renewed restraint. This divergence in global central bank approaches highlights an uneven economic landscape, with some regions facing persistent price pressures while others are preparing for easing cycles later this year.

United States equities retreated decisively, with the Dow Jones Industrial Average falling 0.34 per cent, the S&P 500 dropping 0.84 per cent, and the technology-heavy Nasdaq Composite declining 1.43 per cent. The selloff centred on software stocks following Anthropic’s release of Claude Co-work plug-ins, which amplified fears about competitive disruption in an already crowded artificial intelligence ecosystem.

Investors rotated capital toward economically sensitive sectors seeking broader exposure beyond concentrated technology holdings. This shift pushed the VIX Index to 18.00, its highest level in two weeks, signalling rising anxiety about near-term market direction. The uneven nature of the United States’ recovery suggests merit in considering alternatives to the standard S&P 500, such as an equal-weighted index or low-volatility strategies that provide more balanced sector representation while maintaining exposure to select cyclicals, such as financials and industrials, alongside defensive healthcare segments.

Treasury yields moved lower as the equity selloff gathered momentum, with the two-year note falling 0.2 bps to 3.570 per cent and the 10-year yield declining 1.2 bps to 4.265 per cent. This inverse relationship between stocks and bonds reflected a classic risk-off rotation, with investors seeking safety in fixed-income assets amid turbulence in the technology sector.

The move supports a strategic approach of extending bond duration to the five to seven-year range while accumulating high-quality investment-grade debt, particularly from developed and emerging-market sovereign and corporate issuers. These instruments offer attractive real yields in an environment where central banks may begin to ease later this year, though timing remains uncertain given persistent inflation dynamics in some economies.

Currency markets reflected subtle shifts in global risk appetite, with the United States Dollar Index declining 0.20 per cent to 97.437 as the greenback weakened against nearly all G10 counterparts. The euro strengthened to 1.1819 against the dollar, gaining 0.2 per cent, while the Japanese yen continued its struggle with USD/JPY, rising 0.1 per cent to 155.75.

This yen weakness stemmed from expectations of a strong election victory for Prime Minister Takaichi, which raised concerns about Japan’s fiscal sustainability and long-term debt trajectory. The broader dollar downtrend appears intact, with further Federal Reserve easing expected to dominate currency movements through the remainder of the year, potentially supporting additional gains in EUR/USD while pressuring USD/JPY lower on a broad dollar basis.

Commodity markets displayed sharp reactions to geopolitical developments, with Brent crude oil rising 1.6 per cent to settle at US$67/bbl after reports emerged that the United States Navy shot down an Iranian drone approaching an American aircraft carrier in the Arabian Sea.

This incident reignited tensions between Washington and Tehran, raising immediate fears of supply disruptions. Precious metals surged dramatically, with gold advancing 6.1 per cent to US$4,946/oz and silver climbing 7.4 per cent to US$85/oz. These gains reflected classic safe-haven demand as investors sought protection amid rising geopolitical risks and equity market volatility, though the underlying outlook for oil remains cautiously negative given structural supply dynamics.

Asian markets diverged positively from their Western counterparts, with regional indices gaining ground, lifted by the strength of precious metals and optimism surrounding a newly announced United States-India trade agreement. South Korea’s Kospi Index led regional advances with a remarkable 6.8 per cent jump, fuelled by a powerful rally in chipmaker semiconductor and memory chip-related stocks.

China’s Shanghai Composite added 1.3 per cent, while Taiwan’s TWSE closed 1.8 per cent higher, demonstrating resilience in technology manufacturing hubs despite weakness in United States tech shares. This divergence suggests regional markets may be pricing in different growth trajectories or benefiting from sector-specific catalysts that offset broader global risk aversion.

The cryptocurrency market declined 2.05 per cent to US$2.59T over 24 hours, primarily driven by a Bitcoin-led liquidation cascade that revealed the asset class’s tight correlation with traditional equities. Bitcoin’s drop below the psychologically critical US$74,000 level triggered a wave of forced closures on overleveraged long positions, with liquidations surging 149 per cent to US$263.49 million within a single day.

Ethereum dramatically underperformed, falling 24 per cent over seven days, which weighed heavily on the broader Layer 1 ecosystem, while the Fear and Greed Index plunged to 14, indicating extreme fear across digital asset markets. The 92 per cent correlation between Bitcoin and the S&P 500 underscores how macro liquidity conditions now dominate cryptocurrency price action more than idiosyncratic blockchain developments.

The near-term market trajectory hinges critically on whether Bitcoin can stabilise above US$74,000. A successful defence of this support level could catalyse a relief bounce toward US$77,200 to US$78,400, particularly if the United States spot Bitcoin ETF flow data shows renewed institutional accumulation.

Conversely, a decisive break below US$74,000 may accelerate selling pressure toward US$72,850, intensifying the current downtrend. The market exists in a fragile sentiment-driven state where technical factors like leveraged position unwinds interact with macro correlations, leaving little room for sector-specific catalysts to drive independent price action.

This confluence of factors paints a picture of markets navigating a delicate transition period. Technology volatility rooted in competition over artificial intelligence intersects with divergent global monetary policies and persistent geopolitical risks.

While US equities face headwinds from concentrated sector exposure, Asian markets show resilience, driven by semiconductor strength and optimism about trade deals. The cryptocurrency market’s sharp liquidation cascade ultimately reflects its current status as a risk asset tightly coupled to broader liquidity conditions rather than a diversifying alternative.

Investors would be wise to maintain balanced portfolios with quality fixed income allocations, defensive equity segments, and selective exposure to economically sensitive sectors, while carefully monitoring key technical levels in both traditional and digital asset markets. The path forward demands vigilance regarding central bank communications, earnings results, and geopolitical developments that could rapidly reshape risk sentiment across all asset classes.

 

Source: https://e27.co/gold-jumps-6-1-per-cent-to-us4946-as-geopolitical-tensions-override-dollar-weakness-what-about-bitcoin-20260204/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j