Bitcoin’s Decade-Long Outperformance Over Stocks May Be Over, Chart Suggests

• The S&P 500 hit a fresh all-time high this week while Bitcoin remained in a drawdown.
• The S&P 500-to-Bitcoin ratio has been pushed above its 200-week moving average for the first sustained period on record.
• Previously, the 200-week moving average has always managed to stay above the trendline. 

Bitcoin (BTC) has outperformed the stock market for years, but that changed after the S&P 500 (SPX) hit an all time high this week, while BTC remained in a drawdown. One long-term chart showed that stocks have now pulled ahead. 

The S&P 500-to-Bitcoin ratio, a metric used to show how much Bitcoin is necessary to buy one unit of the S&P 500, has been falling since the apex cryptocurrency’s debut in 2010. As long as BTC continues to outperform the S&P 500, the ratio rises.

However, in the past few weeks, that same ratio has not only gained, but risen above the 200-week moving average (WMA) and has continued to remain there since June.

BTC’s price was up by 0.9% to around $64,500 in the past 24 hours. It is currently nearly 50% below its record high of over $126,000 seen in October. 

While many, include Bitmine’s (BMNR) Tom Lee and Strategy (MSTR) Executive Chairman Michael Saylor, have forecast that the “crypto winter” is now over, making way for “crypto spring,” Bitcoin’s price has struggled to break past $65,000 since the beginning of June, even hitting a 52-week low of around $57,700 in July.

On Stocktwits, retail sentiment around Bitcoin remained in the 'bearish’ zone, while chatter stayed at 'normal' levels over the past day.

Analysts Weigh In

Capriole Investments founder Charles Edwards pointed to a broader shift in risk assets, writing that "oil rejected, breaking down" while "stocks breaking up." According to him, July was rough for risk assets, attributing the weakness to a failed peace deal between the US and Iran, and what he called the "Situational Awareness liquidation."

Talks over the Strait of Hormuz, however, have shown signs of progress. Secretary of State Marco Rubio cited "progress" in the negotiations, and Treasury Secretary Scott Bessent suggested a deal could be reached as soon as Wednesday.

Mechanical Unwind

According to an early July report by asset manager 21Shares, Bitcoin’s sell-off has largely been a mechanical unwind, rather than a break in Bitcoin’s long-term thesis, as the unwinding basis trade and Chicago Mercantile Exchange (CME) leveraged funds reduced shorts from around 100,000 Bitcoin at October’s high to close to 63,000 as the price fell.

The firm said Bitcoin’s drawdown of around 50% was well within the historical range, with previous cycles seeing 75% to 85% drops from peak to trough.

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