Bitcoin has experienced a historic underperformance against U.S. equities, tumbling 22% in Q1 2026 after a 25% decline in Q4 2025. This marks the longest stretch on record—nearly six months—where Bitcoin has lagged behind the S&P 500. Analyst Mark Connors suggests that this prolonged weakness, coupled with earlier deleveraging, could set the stage for a potential rebound, contingent on geopolitical developments and energy market dynamics.
Despite the downturn, Bitcoin showed resilience in March, gaining approximately 1% amid geopolitical tensions, while gold fell 11%. This stability may be attributed to prior liquidations that cleared leveraged positions, allowing Bitcoin to avoid the forced selling seen in other asset classes. Connors notes that the current performance gap between Bitcoin and equities is historically significant and could signal a shift in demand if macroeconomic pressures continue to mount.
Market professionals should monitor Bitcoin’s trajectory closely, as the combination of its extended underperformance and ongoing geopolitical risks may create conditions ripe for a reversal. The evolving landscape of energy markets and liquidity could further influence Bitcoin’s next moves, making it a critical asset to watch in the coming months.
Source: coindesk.com