Bitcoin has experienced a dramatic decline, dropping more sharply than the Nasdaq during recent market downturns. This shift highlights a growing disconnect between Bitcoin and traditional markets, impacting its role as a safe-haven asset. Analysis suggests that Bitcoin’s correlation with the tech-heavy Nasdaq 100 has reached 0.80, a level not seen since 2022. This indicates Bitcoin reacts more strongly to stock market fluctuations than it has in recent years. Despite reaching new all-time highs earlier this year, Bitcoin’s value has plummeted by nearly 25% in the last month, even as major tech stocks have rallied. The current correlation suggests that Bitcoin’s downside performance may be amplified during periods of market decline. This change comes amidst a broader crypto market downturn and shrinking liquidity across exchanges. Experts attribute this dynamic shift to investors shifting focus toward large-cap tech companies, such as Apple and Microsoft, which have attracted substantial capital in recent months. As a result, Bitcoin struggles to maintain its performance during positive market trends. 1.1 trillion dollars were lost from the broader crypto market over just 41 days, according to data, highlighting the volatility of the digital asset space. With high downside beta, Bitcoin is now more susceptible to losses than it was in previous periods, and shows less potential for growth compared to traditional safe-haven assets like gold. While Bitcoin has historically served as a hedge against market uncertainty, this change raises concerns about its future role. 2.5 years of correlation analysis by Wintermute indicates that Bitcoin’s recent performance closely mirrors that of tech stocks. However, this correlation is now leaning bearish, suggesting a greater risk during market downturns. Wintermute explains that this pattern often appears near market lows and not peaks. The article further notes that the current state of crypto liquidity remains a contributing factor, with stablecoin supply stagnant, ETF inflows slowing down, and exchange order books thinning out. This weakening foundation for price support amplifies Bitcoin’s potential losses during selling periods.