Bitcoin may no longer be moving in lockstep with the S&P 500 in a short time frame, but that doesn’t mean it has escaped the broader risk-off regime. In the last morning letter from Axel Adler Jr. the main signal is not the collapse of short-term correlation, but Bitcoin’s continued relative weakness versus US stocks.
Bitcoin weakens against the S&P 500
from Adler argument relies on two charts that, taken together, undermine the increasingly well-known claim that lower correlation between BTC and stocks automatically indicates decoupling. The first is the thirteen-week correlation between BTC and S&P, which recently turned negative and remained below zero. At first glance, that might seem constructive for Bitcoin. But Adler argues that the reading can easily be misinterpreted.
“The 13-week correlation measures how closely the weekly returns of BTC and the S&P 500 have moved together over a short period of time,” he wrote. “In recent weeks, the short-term correlation has turned negative and remained below zero. At first glance, this may look like a loosening of the link between BTC and stocks, but in practice it more likely reflects the choppy nature of recent weeks, which have alternated between isolated Bitcoin bounces and persistent weakness in the index.”
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That distinction is central to the memorandum. A declining or negative correlation just means that the two assets no longer move neatly together during that period. It doesn’t say Bitcoin is strong. It does not say that capital treats BTC as a defensive asset. And it doesn’t confirm that the market has started to price Bitcoin independently of the same macro pressures that hit stocks.
For that, Adler points to the second chart: the BTC/S&P price ratio. This is where the decoupling case fails. The ratio, which tracks Bitcoin’s performance against the S&P 500, has fallen since the start of the year and remains under pressure. In practical terms, this means that Bitcoin underperforms stocks even during periods when short-term correlation has weakened.
“What matters for the market here is not necessarily the fact of the negative correlation, but whether it is accompanied by continued outperformance of BTC versus the S&P,” Adler wrote. “There is no confirmation yet, so it is too early to talk about Bitcoin achieving true independence from the risk regime.”
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That framework is important because it shifts the focus from a single statistical measure to market behavior. If Bitcoin were to truly decouple, the relative strength picture would likely improve. Instead, Adler argues, the market still assigns Bitcoin the role of a higher beta risk asset, one with “higher risk and a greater drawdown amplitude” than the index.
He makes this point even more explicitly in the note’s conclusion. “The market is currently sending an uncomfortable but fairly fair signal,” Adler wrote. “The S&P 500 continues to decline, and BTC not only remains vulnerable to external risk pressures; it continues to underperform the index in relative terms. The prevailing regime remains risk-free.”
In that context, the more useful trigger to watch is not whether the correlation remains negative for another week, but whether the BTC/S&P ratio can turn around and stay higher. Adler says that only “a new stable regime” of relative outperformance would support a true decoupling thesis. Until then, the market message remains simple: the relationship between Bitcoin and stocks may have become less linear, but no less risk-sensitive.
At the time of writing, BTC was trading at $66,652.
Featured image created with DALL.E, chart from TradingView.com