Bitcoin's recent underperformance compared to gold has been a major talking point, with gold hitting a new record above $3,800 per ounce. However, gold isn't the only traditional asset outperforming BTC, which has been stagnant below $115,000.
The U.S. stock market, particularly the S&P 500 index, has been consistently reaching new all-time highs, currently trading near the 6,700 level.
Despite BTC's recent struggles, the leading cryptocurrency remains in a bull market. This cycle has previously seen similar performance divergences between Bitcoin and the S&P 500.
The first significant divergence occurred from March to July 2024, when the S&P 500 rose from 4,000 to 4,600 while Bitcoin declined from $30,000 to $25,000.
A second divergence happened later in 2024, with the S&P 500 rallying from 5,200 to 6,000 between April and October, while Bitcoin's rally only began in November alongside presidential election results.
In the current divergence since May, the S&P 500 has climbed steadily while Bitcoin has consolidated between $110,000 and $120,000. Although BTC briefly reached new highs in August, it quickly retreated to the lower end of its range.
Historical analysis indicates that while Bitcoin and the S&P 500 generally trend in the same direction, they experience periodic extended divergences. Current cycle data suggests Bitcoin is positioned to catch up to its traditional asset counterparts.