Bitcoin Trails Equities Even Amid Strong Bullish Drivers

Bitcoin Underperforms Equities Despite Positive Catalysts

Bitcoin BTC has struggled to gain traction, both in absolute terms and relative to U.S. equities. Adrian Fritz, chief investment strategist at 21Shares, attributes the divergence to macro pressures, investor sentiment, and what he calls a “panda market”—a bearish environment that stops short of a full crypto winter.

“Technically, we’ve entered a bear market,” Fritz told CoinDesk. Bitcoin has dropped over 30% from its highs, breaching the 50-week moving average, a key technical level signaling potential shifts in market momentum. Altcoins have fallen even more sharply, with many down 50% or more.

In the past month, Bitcoin has declined 22%, compared with 2.5% for the S&P 500 and 4% for the Nasdaq, an index historically correlated with BTC. Fritz points to the outsized influence of artificial intelligence on equities. “If you exclude the Magnificent Seven, the S&P isn’t up much,” he said. “AI is the shiny new toy driving sentiment on Wall Street.”

That momentum may also be diverting capital from crypto. While AI-blockchain convergence has long been discussed—for example, using blockchain to verify content authenticity—the actual overlap in investment cases remains limited. “People feel AI’s impact daily. Blockchain still hasn’t delivered that moment,” Fritz said.

Leverage has also weighed on the market. The October correction began with $20 billion in liquidations, and daily liquidations of $500 million have become common. Fritz attributes the decline to excessive risk-taking rather than fraud or hacks.

Even long-term holders are taking profits. “If you bought in 2011 and you’re up billions, selling a few hundred million now doesn’t change your life,” he said.

Gold continues to act as a safe haven, though it has fallen about 10% from record highs. “Bitcoin trades like a risk-on asset,” Fritz noted. “It has gold-like traits—fixed supply, predictable issuance—but reacts quickly to sentiment due to 24/7 trading.”

Technical indicators offer mixed signals. A bounce is possible, but failure to reclaim $102,000 resistance could signal further downside, with the 200-week moving average near $55,000 as a potential floor.

Looking ahead, Fritz expects continued volatility through year-end but sees regulatory clarity and falling interest rates supporting a Bitcoin rebound in 2026. “Bitcoin itself is solid. Altcoins, however, need to prove fundamentals—real revenue or staking yields,” he said. AI-blockchain hybrids may eventually attract attention, but until then, crypto may continue lagging equities