What is Bitcoin's performance compared to traditional markets?

The chart shows us the performance comparison of Bitcoin ($BTC) with the S&P 500 index and gold over the past three months. And the result?

#Bitcoin has seen a sharp decline of -12.2% just in the last week, compared to a slight decline of the S&P 500 index by -1.6% and a slight increase in gold by +0.3%.

What is happening? And why is this important?

Since early 2022, there has been a close correlation between Bitcoin and the S&P 500 index, as both markets have been affected by monetary policies and geopolitical events. When stock performance improves, Bitcoin often follows, and vice versa.

But last week, we witnessed a clear separation between Bitcoin's performance and stocks.

While the S&P 500 index showed relative resilience, Bitcoin dropped sharply, raising questions about whether cryptocurrencies have become oversold.

Is this drop an opportunity or a threat?

Technical and psychological market analysis:

Bitcoin is now in a significant selling pressure zone, known in the markets as the "Rubber-Band Effect." When the market reaches excessive selling levels, a strong rebound often follows once selling pressure eases. Additionally, gold and stocks maintain their stability, indicating that investors have not completely lost their appetite for risk. This could be a positive sign that Bitcoin may see a recovery soon.

What are the conditions for that?

1️⃣ If the S&P 500 index stabilizes or begins to rise again, the significant drop in Bitcoin leaves ample room for massive gains.

This separation between Bitcoin and stocks may not be a sign of structural weakness.