Bitcoin maintains a strong correlation with the U.S stock market 

• Bitcoin rose 0.54% over the past day.
• King Coin has maintained a strong association with the US stock market

Over the past year, Bitcoin [BTC] It saw significant growth, hiking from $38,000 to $109,000.

Such significant development attracted institutional investors, as traditional financial markets embraced Bitcoin as a valuable asset.

This institutional interest has increased the relationship between BTC and the US stock market.

Bitcoin is strongly linked to the US stock market

According to Cryptoquant, Bitcoin has remained closely linked to the performance of the US stock market.

For example, in 2024, BTC and NASDAQ showed a historically strong correlation that is currently at historic levels.

A similar trend can be observed with the S&P 500, although there are instances where it is separated.

For example, on August 4th, 2024, when the US stock market fell, BTC fell to $49,000. In November, after the election, BTC and the stock market enjoyed a strong rally.

The increase in correlation indicates that institutional investors now see Bitcoin as a traditional asset. This market perception has aligned its performance with the overall stock market.

Significantly, with Trump now in office, and the crypto market anticipating relaxed regulations, such as the repealed SAB 121, BTC could become more widely accepted as an asset class among institutional players.

This recognition, in turn, will accelerate BTC adoption and growth.

What does it mean for BTC?

With Bitcoin showing sustained growth and increasing acceptance among institutional investors, the king coin is well-positioned for further growth.

Therefore, as the US stock market continues to stabilize and continues to grow, BTC will continue to make gains.

We can see these future possibilities as the stock’s return to Bitcoin flow remains above 1 at press time. Although that had come down, it remained at 2.11, indicating that investors were still bullish and were seeking higher levels.

Thus, while the decline indicates cooling, BTC is far from a bear market signal at this level.

Additionally, Bitcoin’s Sharpe ratio has remained above 1 over the past five months, indicating that Bitcoin offers returns that are much higher than its risks.

This makes it a very attractive investment on a risk-adjusted basis.

At this level, the Sharpe ratio reflects strong confidence among investors, which stimulates other players to enter the market.

Finally, Bitcoin’s VDD Multiply indicated market maturity, with the metric currently remaining above 1. As such, the Crypto network is mature, and not all coins require frequent movement to maintain high valuations.

This indicates market confidence in the long-term potential of BTC. These market conditions are in line with traditional market settings, making BTC attractive to institutional players.

In conclusion, with Bitcoin positioning itself as an attractive asset for institutional investors, we can see BTC continuing to make further gains.

---

Read Bitcoin [BTC] Price prediction 2025-2026

---

So, if you model the prevailing market conditions, BTC will reach $107k and make a new high since there is no significant resistance above here.

However, with minor corrections becoming part of this uptrend, a pullback will see a drop to $102k.