Bitcoin Erases 3-Month Gap Against S&P 500 in 72 Hours: Dominance is Waning

While Bitcoin erased its three-month underperformance against the S&P 500 in the last 72 hours, historical data shows that periods of outperformance remain strong but are becoming increasingly limited.

In its August 21 assessment, Glassnode stated that Bitcoin closed the three-month gap against the S&P 500 within the last 72 hours. This comparison measures the relative performance of the two assets rather than just price levels. The analysis reveals that BTC is exhibiting a strong short-term recovery.

In the upper section of the first chart, the S&P 500 remains up 20% over the overall period shown, while Bitcoin is down 31%. In the lower section, Bitcoin’s relative performance indicator against the S&P 500 rose to 2.82x over four trading sessions. This movement is marked as the erasure of an approximately three-month gap in just four sessions.

Bitcoin’s Powerful Surges are Shrinking from Cycle to Cycle

The second chart displays BTC’s 90-session excess return compared to the S&P 500. This metric explains the performance difference between the two assets over 90 trading sessions in terms of points. Green areas represent periods when Bitcoin outperformed the index, while red areas represent periods when it lagged behind.

Following jumps that reached levels of +377, +103, and +76 points in past cycles, the latest measurement was -30.1 points. The chart indicates that the excess return during periods of Bitcoin dominance has diminished as years and market cycles progress.

Historically, Bitcoin lags behind the S&P 500 approximately two out of every three trading days. Conversely, the return gap that forms on days it takes the lead is larger. While the recent move shows that this gap can close quickly, it also reveals that these strong surges are not as extensive as in previous cycles.