Why Bitcoin Decoupled from the Nasdaq: A Look at Leverage and Market Sentiment

Despite Gold and the Nasdaq 100 posting solid gains over the past week, Bitcoin (BTC) significantly underperformed, leading some to question its role as either a risk-on or safe-haven asset. While the safe-haven metal Gold surged 4.85% and the risk-on Nasdaq 100 climbed 1.34%, Bitcoin's price actually declined by about 2.09%.

The Breakdown in BTC-Nasdaq Correlation

For most of the year, Bitcoin's price movements were closely tied to the tech-heavy Nasdaq 100. This correlation held early in the week following hints from Federal Reserve Chair Jerome Powell about a possible interest rate cut and an end to Quantitative Tightening (QT), which boosted both assets.

However, the relationship broke sharply on October 15. From that point, the Nasdaq 100 finished the week up 0.44%, while Bitcoin plunged 3.71%.

Leverage Washout Cited as the Main Driver

On-chain analysis suggests that the major crypto crash on October 10, which resulted in over $19 billion in liquidations, is the primary cause for Bitcoin's underperformance.

• Synthetic Demand: Analysts found that prior to the crash, capital flowing into derivatives exchanges (USDT)—often used for leveraged positions—was increasing, while inflows to spot exchanges (USDC)—used for direct asset purchases—were declining. This suggests that Bitcoin's earlier price appreciation was largely driven by speculative leverage and derivatives, not organic spot buying.
• Speculation Evaporated: The October 10 crash essentially "washed out" this speculative buying pressure, leaving Bitcoin without the fuel needed to rally alongside the recovering Nasdaq 100.

Tentative Optimism for the Week Ahead

Despite Bitcoin's two-week slump, which began with a drop from $122,000 to $100,000, investor sentiment remains resilient, evidenced by the faster recovery of altcoins. Over the past week, while BTC fell 2%, Ethereum (ETH) rose 5.96% and Solana (SOL) gained 7.12%.

For Bitcoin to join the Nasdaq's recovery, attention will shift back to potential de-escalation of the US-China tariff war. Hopes are rising as President Donald Trump indicated the high tariff on China is not "sustainable," suggesting it was a negotiating tactic. Working-level talks are scheduled this week in Malaysia to set the stage for a potential US-China summit at the APEC meeting on October 31.

This week will also bring the release of crucial macroeconomic indicators, including the delayed CPI data on Friday, along with manufacturing/service PMI figures.

October 2025, Cryptoniteuae