Bitcoin Diverges from Software Stocks, Indicating Potential Major Move Ahead
Bitcoin and software stocks are breaking up — and history says a major crypto move is coming

Image: Coindesk
Bitcoin's correlation with software stocks has significantly dropped, suggesting a potential upcoming rally. The iShares Expanded Tech-Software Sector ETF (IGV) has surged 36% since April, while Bitcoin has decreased by 10%. Historically, such low correlation precedes substantial Bitcoin price increases.
- 01The iShares Expanded Tech-Software Sector ETF (IGV) has increased by 36% since April 10, indicating a return to a long-term uptrend.
- 02Bitcoin's 20-day rolling correlation with IGV has fallen to 0.58, a level associated with previous major Bitcoin rallies.
- 03Since May 14, Bitcoin has declined about 10%, contrasting with IGV's 12% gain, marking a significant divergence.
- 04Historically, periods of low correlation between Bitcoin and IGV have been followed by Bitcoin outperforming the software sector.
- 05Bitcoin is currently trading near $73,000, below its 200-day moving average of $79,388.
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Bitcoin and software stocks have diverged sharply, raising speculation about a potential major price movement for Bitcoin. The iShares Expanded Tech-Software Sector ETF (IGV) has rallied 36% since April 10, recovering its 200-day moving average, while Bitcoin has fallen by 10% during the same period. The 20-day rolling correlation between Bitcoin and IGV has dropped to 0.58, a level that historically precedes significant Bitcoin rallies. Previous instances of such low correlation occurred before notable price surges in late 2023 and mid-2024. The recent divergence marks one of the largest disconnects between these assets, with IGV gaining approximately 12% since mid-May while Bitcoin has declined. As Bitcoin trades around $73,000, it remains below its 200-day moving average of $79,388, prompting analysts to question whether Bitcoin will catch up to the recovering software stocks or if IGV's momentum is sustainable.
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