Bitcoin may no longer track the S&P 500 in the brief term, but that doesn’t mean it has escaped the broader risk-mitigation regime. In Axel Adler Jr.’s latest morning report. the more crucial signal is not a breakdown in short-term correlation, but Bitcoin’s continued relative weakness relative to US stocks.

Bitcoin is weakening against the S&P 500

Adler argument is based on two charts that together disprove the increasingly popular claim that a lower BTC-equity correlation automatically indicates decoupling. The first is the 13-week BTC-S&P correlation, which has recently become negative and remained below zero. At first glance, this may look constructive for Bitcoin. However, Adler argues that this reading is straightforward to misinterpret.

“The 13-week correlation measures how closely together the weekly returns of BTC and the S&P 500 have moved in the short term,” he wrote. “In recent weeks, the short-term correlation has turned negative and remains below zero. At first glance, this may look like a loosening of the link between BTC and stocks – but in practice it is more likely to reflect the choppy nature of recent weeks, with isolated Bitcoin gains interspersed with continued index weakness.

This distinction is most crucial on this note. A decreasing or negative correlation only says that the two assets are no longer moving together during this window. This does not mean that Bitcoin is mighty. This does not mean that capital treats BTC as a defensive asset. It also doesn’t confirm that the market has begun to price Bitcoin regardless of the same macro pressures hitting stocks.

For this purpose, Adler points to the second chart: the BTC/S&P price ratio. This is where the argument for separation falls apart. The index that tracks Bitcoin’s performance against the S&P 500 has fallen since the beginning of the year and remains under pressure. In practice, this means that Bitcoin stocks underperform even during periods when short-term correlation weakens.

“For the market, what matters here is not the mere fact of negative correlation, but whether it is accompanied by a permanent advantage of BTC over S&P,” Adler wrote. “There is no confirmation of this yet, so it is too early to talk about Bitcoin achieving true independence from the risk regime.”

This framework matters because it shifts attention away from a single statistical measure and back to market behavior. If Bitcoin did decouple the situation, the relative strength picture would likely improve. Instead, Adler argues, the market continues to assign Bitcoin the role of a higher-beta asset, with “higher risk and greater downside amplitude” than the index.

He emphasizes this even more clearly at the end of the note. “The market is currently sending an uncomfortable but quite honest signal,” Adler wrote. “The S&P 500 Index continues to decline, and BTC not only remains vulnerable to external de-risking pressures – it continues to underperform the index relative to the index. The dominant regime remains risk-free.”

In this context, a more useful factor to watch is not whether the correlation will remain negative for another week, but whether the BTC/S&P ratio can reverse and remain higher. Adler argues that only a “stable new system” with relative better performance would validate the true decoupling thesis. Until then, the market message remains plain: the relationship between Bitcoin and stocks may have become less linear, but no less risk-sensitive.

At the time of publication, the BTC price was $66,652.

Featured image created with DALL.E, chart from TradingView.com