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Bitcoin’s Negative Correlation With Nasdaq Persists, and History Suggests a Bottom May Be Forming
Historical patterns show that bitcoin often bottoms when its correlation with the Nasdaq 100 breaks down, a dynamic now appearing for the fourth time in five years.
Dec 4, 2025, 6:23 p.m.
What to know:
- The extended negative correlation between bitcoin and the Nasdaq 100 mirrors past periods such as July 2021, September 2023 and August 2024, all of which aligned with significant bitcoin lows.
- Bitcoin remains down 27% from its October peak while the Nasdaq 100 sits just 2% below record highs, underscoring a sharp divergence that has historically preceded bitcoin recoveries.
Bitcoin is once again behaving differently from the traditional risk asset complex, and the latest divergence may be sending an important signal.
Negative correlation between bitcoin and the Nasdaq 100 has often aligned with market bottoms for bitcoin, and the current setup looks similar to several past turning points.
This is now the fourth time in the past five years that the two assets have moved into negative territory on a 20 day correlation coefficient, which currently sits at -0.43. The pattern also resembles the negative correlation periods seen in summer 2021 and August 2024, both of which coincided with meaningful bitcoin lows. Although bitcoin is frequently described as a leveraged higher beta tech asset that tends to outperform during risk on periods and underperform during risk off periods, the present divergence is notable.
STORY CONTINUES BELOW
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Bitcoin fell as much as 36% from its October all time high. The Nasdaq 100, by comparison, saw a maximum drawdown of only 8% and now trades just 2% below its record high. Bitcoin has yet to recover in the way the broader tech sector has, currently sitting 27% below its all-time high.
The previous negative correlation instance unfolded during the yen carry trade unwind, which pushed bitcoin down to roughly $49,000, a move that ultimately marked a local bottom. Before that, negative correlation appeared in September 2023 when bitcoin traded just below $30,000, followed by a rally to $40,000 by year end. The first instance occurred in May 2021 during the China mining ban, when bitcoin fell from $60,000 to $30,000 before recovering to new highs in November 2021.
Taken together, these episodes show that negative correlation between bitcoin and the Nasdaq 100 has often emerged near significant turning points in bitcoin. While the current setup suggests another bottom may be forming, the timing of any rebound remains uncertain.
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.
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