Bitfinex report: Bitcoin could further decouple from stocks and regain leadership as a global risk asset

Bitfinex Alpha said in its latest report that following the relatively resilient performance of Bitcoin last week, with a weekly decline of only 0.65%, almost flat and far better than traditional risk assets, it is clear that this is merely a delayed downside reaction. Although the BTC/S & P 500 ratio has surged to near-all-time highs of only 5%, showing strong relative strength, the market has now sold off. We believe that stocks are becoming deeply oversold, and a short-term rally may close this gap in the medium term. However, the short-term funding and unpositioned squaring contract trends also suggest that volatility is imminent for Bitcoin. Nonetheless, structurally, it appears that the foundation for a strong performance in the late second quarter is forming. As macro volatility cools, ETF inflows resume, and the sovereign narrative re-emerges, Bitcoin could further decouple from equities and regain its leadership as a global risk asset. Moreover, while the Federal Reserve remains cautious amid uncertain inflation dynamics, the overall picture suggests that trade policy, rather than monetary policy, could be a greater risk to economic momentum in the coming quarters.