Bitcoin Dips as Stocks Soar: A Crypto-Market Divergence

In a notable shift, Bitcoin has fallen back below $90,000, experiencing a dip of more than 3% in the past 24 hours. This downturn contrasts sharply with the performance of the S&P 500, which has surged over 16% year-to-date. The cryptocurrency is currently down approximately 5% for the year, a significant departure from its typical correlation with stock market movements.

This divergence is particularly striking, as it represents the first time in a decade, since 2014, that Bitcoin has not moved in tandem with the broader stock market. Bitcoin's value has also declined roughly 30% from its all-time high of over $126,000 reached in October. Analysts point to outflows from Bitcoin ETFs as investors increasingly allocate funds towards precious metals.

Strategists observe a strong momentum in the metals market, with gold up nearly 60% and silver up almost 100% year-to-date. Despite regulatory advancements, including the Clarity Act in Congress, the question remains about what will drive crypto prices higher next year. However, anticipated Federal Reserve easing and the Clarity Act are considered bullish indicators for the crypto market, with some historical analysis suggesting gold's rise often precedes an upward trend in Bitcoin.