Bitcoin's price has been on a downward slide since October last year, with the cryptocurrency experiencing its worst market downturn since late 2021. The decline has seen Bitcoin's value drop by over 50% from its all-time high of $126,000.
The correlation between Bitcoin and tech stocks has been cited as one reason for the decline. Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, pointed out that the 30-day Pearson correlation between Bitcoin and major indexes was near-perfect in recent months.
However, this positive correlation turned negative when Bitcoin's price began to fall ahead of tech stocks. The momentum trade, which had been driving the cryptocurrency's price higher, suddenly reversed.
A sell signal was triggered when Michael Saylor, CEO of MicroStrategy, announced plans to sell some of the company's Bitcoin holdings during its Q1 2026 earnings call on May 5. Although the sale was initially met with skepticism, it appears to have been a sign that the market was about to turn.