Bitcoin and crypto assets flatline even as the February markets rally pushes higher

In January, when risk assets of all stripes were under pressure, a narrative began to form in the markets: that the selloff in tech stocks and cryptocurrencies were ostensibly intertwined.

Nic Carter, cofounder of Coin Metrics, summed up this new thinking in an interview on Yahoo Finance Live, saying, “Now we have a nonzero correlation between Bitcoin and risk assets, in particular long duration tech stocks, things like that.” He attributed this to what he called “cryptocurrencies being financialized, and being incorporated into the mainstream financial apparatus.”

The translation: In the past year, crypto investing has gone mainstream—like being long an ETF that holds a basket of tech stocks.

The data seemed to back up this belief that a new correlation was forming. After all, crypto and tech stocks had a great run in Q4, 2021, and then both asset classes dramatically underperformed last month. Bitcoin fell 17% in January (Dogecoin and Ethereum’s Ether fared even worse) while the tech-heavy Nasdaq suffered a double-digit decline through the Jan. 27 close.

But suddenly this markets wisdom is being tested. Aided by knockout earnings from the likes of Apple, Microsoft, and Google’s Alphabet in the past week, tech stocks are suddenly posting impressive gains again. The Nasdaq has rallied nearly 1,000 points over the past three trading sessions, good for a 7.5% gain.

And the rally looks like it still has legs.

In premarket trading on Wednesday, Nasdaq futures were climbing 1.6% at 5 a.m. ET, looking to notch a fourth straight day of gains. Among the stocks to watch is Alphabet, up a whopping 10% as investors cheer its 20-for-1 stock split.

And crypto? It’s been, at best, a big snooze. Bitcoin was trading at $38,500—essentially flat over the past 24 hours. It’s been under $40,000 for the past four weeks, and continues to trade around 20% below the closely watched 200-day moving average.

It’s not the price action that’s frustrating crypto bulls, but the lackluster volumes. As the Market Ear blog reports, Bitcoin trading volumes sank in mid-January, and have yet to recover.