Bitcoin Mirrors TradFi Amid Surging Correlations With Major Indexes – Details

Bitcoin is currently trading at critical price levels amid heightened macroeconomic uncertainty and escalating global tensions. After a volatile period, BTC staged a notable rebound last week following an announcement by U.S. President Donald Trump declaring a 90-day pause on all tariffs except those targeting China. The policy shift brought a temporary sense of relief to financial markets, allowing crypto and equities to post short-term gains. However, the broader environment remains unstable.

New data from IntoTheBlock reveals that Bitcoin is now moving increasingly in sync with traditional financial markets (TradFi). Since Trump’s initial tariff headlines in March, the correlation between Bitcoin and major indices like the S&P 500, Dow Jones, and Russell 2000 has surged above 0.75. This strong correlation suggests that Bitcoin is currently behaving less like an uncorrelated hedge and more like a risk-on asset reacting to macro developments.

With BTC sitting just below key resistance and the broader market still on edge, the next move could define short to mid-term momentum. Traders and analysts alike are closely watching both macro catalysts and technical setups as Bitcoin navigates this uncertain but potentially pivotal moment.

Bitcoin Correlation With Traditional Markets Signals Macro Sensitivity

Global tensions and macroeconomic uncertainty continue to dictate Bitcoin’s price direction, but recent price action is beginning to hint at a potential shift. With inflation beginning to ease and volatility shaking U.S. equity markets, many believe the Federal Reserve may soon be forced to lower interest rates in an attempt to stabilize the economy. However, any decisive policy move may still be weeks away, and developments between the U.S. and China are evolving rapidly, keeping markets on edge.

In this fragile environment, Bitcoin’s behavior is closely mirroring that of traditional financial markets. According to top analyst Maartunn, Bitcoin is now moving in tight correlation with major indices such as the S&P 500, Dow Jones, and Russell 2000. Since Trump’s tariff announcements in March, these correlations have surged above 0.75 — a sign that traditional markets are leading the dance, and Bitcoin is simply keeping pace.

This increasing alignment means Bitcoin is currently behaving like a high-beta macro asset, reacting more to economic headlines and stock market volatility than crypto-native catalysts. While this dynamic highlights Bitcoin’s sensitivity to broader financial trends, it also opens the door for a significant move if macro conditions improve — particularly if rate cuts or positive diplomatic developments emerge.

Price Consolidates As Bulls Aim to Reclaim Momentum

Bitcoin is currently trading at $84,000 after days of consolidation within a wide range. On the 4-hour chart, BTC has been holding above the $75,000 support while facing resistance just below the $89,000 zone. This rangebound movement highlights market indecision, with bulls attempting to regain control after a volatile period.

BTC has reclaimed the 4-hour 200-day moving average (MA), which sits around $83,500 — a key short-term technical indicator. The price is also testing the 4-hour exponential moving average (EMA) near $84,000. A clean break and close above these levels would confirm short-term bullish strength and could set the stage for a push toward $88,000 and possibly the $90,000 resistance level.

However, the structure remains fragile. If Bitcoin loses the $82,500 level, the bearish pressure could intensify, opening the door for a rapid drop below the $80,000 psychological threshold. This would invalidate the short-term recovery structure and likely trigger panic among over-leveraged positions. All eyes are now on whether BTC can solidify its stance above key moving averages to build momentum — or whether sellers will reclaim dominance and push prices lower.

Featured image from Dall-E, chart from TradingView