Bitcoin [BTC]The world’s largest cryptocurrency, remains under bearish pressure as the short-term downtrend remains intact.
While market sentiment increasingly points to the possibility that a local top is already forming, Bitcoin’s relationship with traditional stock markets presents a contrasting story, strengthening the case for a potential upside reversal.
Stock markets could set the stage for Bitcoin
BTC and US stock indexes, especially the S&P 500, Russell 2000 and Nasdaq, have historically shown a strong correlation in price movements.
In previous cycles, this alignment has often resulted in both asset classes being at the market top around the same time period, a pattern that has played out across four different cycles.
July 2023 stands out as a unique case. Although these markets seemed to peak around the same time, BTC quickly recovered, leaving other assets behind for an extended period of time.
However, this cycle is different. Since September 2025, the price action has diverged. Bitcoin has trended lower while stocks have maintained their bullish momentum.
Source: TradingView
In relative terms, BTC is down about 30%, while the S&P 500 is up 6.32%, the Russell 2000 is up 13.27%, and the Nasdaq is up 7.74%.
This divergence puts Bitcoin in a position of relative underperformance. Historically, such gaps have often narrowed over time, implying that Bitcoin could attempt to close the gap through upward price movements as capital continues to build.
While not guaranteed, the lineup remains notable.
Can Bitcoin close the gap?
Liquidity outflows remain the biggest challenge for Bitcoin, and the market must reverse this trend to support a sustainable recovery.
Capital outflows have been dominating for several months. Looking at US exchange-traded Bitcoin funds as a benchmark, investors have sold approximately $4.68 billion worth of Bitcoin between November and the current period. SoSovalue.
Despite this continued selling, BTC’s price has held up relatively well. Since November 2025, when the asset recorded its first monthly net turnover in two months, Bitcoin has fallen from $91,200 to around $88,300 at the time of writing.
Source: Sosowaarde
Market participants have absorbed much of this selling pressure, with Bitcoin’s value falling by around $2,900 despite the size of the outflow.
Bitcoin’s hashrate has remained high even during this period of price weakness. Historically, a rising hashrate reflects continued demand for networks as miners expand their operations to meet participation levels.
The behavior of miners further supports this view. In recent days, miner-associated wallets have added more than 400 Bitcoin to their reserves, indicating a preference for accumulation over distribution. These dynamics support Bitcoin’s price stability in the near-to-short term.
Stablecoin liquidity remains a key risk
Major downside risk remains in the form of declining stablecoin liquidity.
Data from CryptoQuant shows an outflow of $7 billion from ERC-20-based stablecoins, with total supply falling from $162 billion to $155 billion in a short period of time.
Source: CryptoQuant
The last similar outflow occurred during the 2021 Terra-Luna collapse, a period that preceded a sharp decline in Bitcoin’s price.
Outflows of this size typically reflect reduced risk appetite in the broader crypto market. With Bitcoin now at the center of that ecosystem, continued stablecoin redemptions continue to pressure the near-term outlook.
Final thoughts
- Bitcoin’s historical correlation with stocks indicates that the asset could be positioned for a catch-up.
- The market continues to absorb the selling pressure, although a $7 billion stablecoin outflow remains a key downside risk.