Bitcoin Drops with Stocks, But That’s Not the Whole Story

Short-term selloffs, simulated downside, and why Bitcoin still leads in this macro

After trading in a tight range just below its all-time high for most of July, Bitcoin pulled back slightly at the end of last week.

Was this because of some Bitcoin-specific news? Not at all.

The move followed a broad risk-off shift in markets, triggered by another round of labor market data and renewed concerns about U.S. tariffs.

Now, it’s worth noting that the labor data wasn’t particularly bad and the tariffs, so far, haven’t had the kind of negative impact some feared. But that’s beside the point.

What matters is how Bitcoin reacts in this kind of environment. And historically, when equities sell off sharply, Bitcoin tends to follow.

That’s not new. It’s a recurring pattern driven by how investors treat Bitcoin as part of the broader basket of risk assets.

Let’s dig into the data to see exactly how this plays out.

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Bitcoin Drops with Stocks, But That’s Not the Whole Story

The Takeaway

Bitcoin’s recent dip wasn’t driven by crypto-specific news but by a broader risk-off move in equities, an expected outcome given Bitcoin’s historical correlation to the Nasdaq on sharp down days.