Bitcoin and US stock correlations unexpectedly turned positive in March, as markets simultaneously plunged into extreme panic.

Gate News Report, March 23 — As Middle East geopolitical conflicts continue to escalate, the correlation between Bitcoin and the US stock market reversed in late March, with both asset classes moving in the same direction again. Meanwhile, sentiment indicators for cryptocurrencies and stocks both fell into the “extreme panic” zone, prompting cautious outlooks from analysts.

In the first half of March, Bitcoin briefly moved independently, outperforming gold and US stocks, leading to speculation that a large-scale capital rotation was underway. However, in the second half of the month, the situation quickly changed. Recent developments in Iran conflicts put both asset classes under pressure, causing Bitcoin to lose its previous excess gains. The Crypto Fear & Greed Index has returned to the “extreme panic” level, and a survey by the American Association of Individual Investors (AAII) shows that 52.0% of retail investors are pessimistic about the next six months — a new high since May 2025.

On-chain data platform Alphractal pointed out that simultaneous panic in both markets is a rare signal, often indicating broader market stress. Technical analyst Tony Severino (CMT) further noted that historically, when Bitcoin’s correlation with the S&P 500 sharply rebounds from -0.5 and turns positive, it often signals potential for significant stock market volatility, with Bitcoin prices frequently experiencing deep corrections afterward.

Currently, Bitcoin’s correlation with the S&P 500 has turned positive, suggesting that in the short term, both asset classes may continue to move in sync. With the easing of rate cut expectations and geopolitical tensions unresolved, market sentiment is unlikely to recover quickly. Severino warned that any rebound could be a “dead cat bounce,” with prices temporarily rising before accelerating downward. BeInCrypto’s short-term analysis indicates that if Bitcoin falls below the $68,000 level, the next support could be around $65,000.