• Bitcoin decoupled from Nasdaq last week, falling 2.09% while other risk assets rose significantly.
• On-chain data suggests speculative leverage, not organic demand, drove pre-crash Bitcoin prices.
• US-China tariff talks and upcoming macro data are key factors for Bitcoin’s recovery this week.

Amid a week where major assets, including Gold and the Nasdaq 100, posted gains, Bitcoin lagged significantly. The recent Bitcoin decoupling suggests the asset is neither a risk-on nor a safe-haven asset.

According to Coingecko, Bitcoin’s price has declined by approximately 2.09% over the past seven days. This occurred while safe-haven gold surged 4.85% and the risk-on Nasdaq 100 Index climbed 1.34%.

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What Caused the BTC-Nasdaq Decoupling?

For much of the year, Bitcoin has maintained a high correlation with the Nasdaq 100, generally rising and falling in tandem. This relationship held early last week.

The mood was positive through Tuesday after Federal Reserve Chair Jerome Powell hinted at a potential interest rate cut at the October FOMC meeting and a possible end to Quantitative Tightening (QT). These statements led to minor gains for both the Nasdaq and Bitcoin.

However, the correlation began to break sharply starting at 9 am UTC on October 15. From that point, the Nasdaq 100 finished the week up 0.44%, while Bitcoin plunged 3.71%.

Leverage Washout Cited as Primary Cause

On-chain analysts point to the massive crypto crash on October 10—an event that saw over $19 billion in liquidations and injected fear into the market—as the likely culprit.

TeddyVision, an analyst at CryptoQuant, highlighted two distinct trends between August 1 and mid-October. Analyzing the 30-day Simple Moving Average (SMA) of stablecoin net inflows to exchanges, he found that USDC inflows to spot exchanges (typically used for spot buying) declined.

Meanwhile, USDT inflows to derivatives exchanges (often used for collateral) increased. This suggests that capital used for actual asset purchases decreased. Meanwhile, liquidity supporting leveraged derivatives, such as futures and perpetual contracts, surged.

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The Role of Synthetic Demand

According to this analysis, it might not have been organic spot demand which have driven the recent price appreciation. Instead, it was likely caused by speculative leverage and synthetic exposure linked to derivatives and ETF-related capital rotation.

The October 10 crash may have instantly evaporated the market’s speculative buying pressure, explaining why Bitcoin failed to rally alongside the recovering Nasdaq 100.

Geopolitical Hopes and Altcoin Strength

Bitcoin showed a slight rebound on Sunday, crossing the $108,000 mark for the first time since the drop. For Bitcoin to successfully chase the Nasdaq’s recovery this week, attention must shift back to the potential de-escalation of the US-China tariff war, which initially caused the price to plummet from the $122,000 level to $100,000.

The atmosphere appears tentatively optimistic. In a Friday interview, President Donald Trump indicated that he does not believe the 100% tariff on China is “sustainable,” suggesting that the high tariff was merely a negotiating tactic to gain concessions on rare earth exports.

Treasury Secretary Scott Besent is scheduled to hold working-level talks with Chinese Vice Premier He Lifeng this week in Malaysia. These discussions aim to set the stage for a potential US-China summit at the APEC meeting on October 31 in Gyeongju, South Korea.

Despite Bitcoin’s two-week slump, investor sentiment remains resilient. The rapid recovery of altcoins evidences this. While BTC fell approximately 2%, ETH rose 5.96% and SOL gained 7.12% over the same period, signaling that lower-cap altcoins are recovering faster than the benchmark asset.

Looking Ahead: Macro Indicators and Earnings

This week, we will also see the release of crucial macroeconomic indicators, including the delayed CPI data on Friday due to the shutdown of the US government. Manufacturing and service PMI figures and the University of Michigan Inflation Expectations will be released concurrently.

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