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The S&P 500 rallied to its all-time high levels of 6,600 for the first time in history. With this, the global equity index has given 35% returns since the April lows. On the other hand, Bitcoin price continues to hold steady above $115,000, showing signs of decoupling from the US equity index.
S&P 500 Rallies Ahead of Fed Rate Cut
The US stock market is showing historic strength, with the S&P 500 posting one of its rarest rallies in decades. According to Carson Research, the index has gained more than 30% in the past five months. It is a feat achieved only six times since 1975.
In every prior instance, the S&P 500 ended higher over the next six and 12 months, with average 12-month gains of 18.1%. The momentum comes as the Federal Reserve prepares to begin rate cuts, coinciding with rapid advancements in artificial intelligence. Analysts believe that this could mark the beginning of a new era for equity markets.
While everyone is bullish on the Fed rate cuts, analysts at JPMorgan have a different take. JPMorgan has cautioned that US equities could face a short-term pullback if the Federal Reserve begins cutting rates this week.
The broader market consensus is that the US central bank will announce a 25 bps rate cut, in a major pivot on its monetary policy. Speaking on this, David Kelly, chief global strategist at JPMorgan Asset Management, said:
Stocks remain near record highs despite soft labor data. However, historical trends suggest markets often stall once monetary easing starts.
The bank maintained a bullish stance on emerging markets and mining stocks, while signaling a preference for long-term bonds. Additionally, JPMorgan also forecasts a 4–5% decline in the US dollar over the coming months.
S&P 500 and Bitcoin Correlation
Data shows Bitcoin’s 30-day rolling correlation with the S&P 500 is around 0.60, reinforcing its status as a risk asset. However, short-term correlations have recently turned negative, suggesting potential decoupling.
On one hand, while US equities trade near record highs, Bitcoin consolidates. Historically, the six-month average correlation between the two has hovered near 0.2, reflecting variability.
Meanwhile, Bitcoin’s correlation to Gold has flipped negative at −0.53, weakening its “digital gold” narrative. Gold has outperformed Bitcoin so far in 2025, benefiting from market volatility. On a six-month basis, Gold’s correlation with the S&P 500 sits near 0.1. That also underscores its role as a portfolio diversifier, while Bitcoin remains the more volatile asset.
Where’s Bitcoin Price Heading Next?
Crypto analyst Ali Martinez reported that Bitcoin’s sell-side risk ratio has fallen below 0.1%. Historically, this level is associated with local bottoms, accumulation phases, and reduced selling pressure.
Crypto analyst Daan Crypto Trades noted that Bitcoin is once again moving sideways while stocks and gold rally. He added that such consolidation phases can last for extended periods, but historically, Bitcoin has tended to catch up when broader macro trends and risk-on sentiment remain supportive. According to him, the current cycle has been marked by prolonged sideways trading followed by sharp one-to-two-month rallies.
https://x.com/DaanCrypto/status/1967680068143980921
Bitcoin bulls continue to stay optimistic of a rally ahead in the making with new all-time highs soon. Popular Bitcoin investor Joe Consorti noted, “Gold and the S&P 500 are hitting new highs. Bitcoin sits less than 8% from its own. With a Fed rate cut expected Wednesday plus October (its 2nd-best month) around the corner, $150K may not be far”.
