Why did Bitcoin remain an "outsider" while the Dow Jones Industrial Average hit a new high?
Key findings : In February 2026, the Dow Jones Industrial Average continued to reach new highs (approximately 45,200 points), while Bitcoin plummeted by 23.2% (84k → 64k). The main reason was the large-scale rotation of funds from high-volatility crypto assets to low-risk traditional US stocks, coupled with historic outflows from Bitcoin ETFs and leveraged liquidations amplifying the decline. The correlation coefficient between the two is -0.15, indicating a significant divergence.
Market performance comparison
| index | Dow Jones Industrial Average (DIA ETF) | Bitcoin (BTC) | difference |
|---|---|---|---|
| February 1st price | ~45,000 points | $84,122 | - |
| Price on February 24 | ~45,200 points | $64,578 | - |
| Changes during the period | +1.2% | -23.2% | 24.4 percentage points |
| Market sentiment | Optimistic about reaching new heights | Extreme fear (index 9) | polarization |
| Key Driver | Federal Reserve policy expectations, corporate profits | ETF outflows and leveraged liquidations | Completely deviated |
The three pillars of the Dow Jones Industrial Average hitting new highs
1. Stable Monetary Policy Expectations: The Federal Reserve maintained its interest rate policy, fueling market expectations for rate cuts. Traditional financial sectors (especially bank stocks) benefited from the stable interest rate environment. The 10-year Treasury yield remained stable at around 4.2%, providing support for the stock market.
2. Robust Corporate Earnings : The February earnings season showed that 68% of Dow Jones Industrial Average components exceeded earnings expectations, with defensive sectors such as financials and healthcare performing particularly well, attracting safe-haven funds.
3. Funds Rotate Towards Low-Volatility Assets: Net inflows into US equity ETFs increased by 94% year-on-year, indicating a shift in investor preference from high-volatility assets to stable-yield targets. AI concept stocks (NVDA, MSFT) continued to attract funds, but traditional blue-chip stocks also benefited from the decline in risk appetite.
Four major pressures that have made Bitcoin an "outsider"
1. Historic ETF Outflows Since November 2025, Bitcoin spot ETFs have seen net outflows of $6.2 billion , with approximately $2.8 billion flowing out in February alone. This large-scale withdrawal of funds by institutional investors into traditional asset classes is the most direct reason for Bitcoin's decline.
2. Leveraged liquidation amplified the decline: A single-day plunge of 15.4% on February 6 ($73,023 → $62,854) triggered over $3.5 billion in leveraged long liquidation. The chain reaction in the derivatives market exacerbated the selling pressure in the spot market.
3. Shift in Risk Asset Preferences: Funds have clearly shifted from crypto assets to traditional US stocks, particularly:
- AI narratives absorb funds that originally belonged to Bitcoin.
- Low-volatility blue-chip stocks become the preferred safe-haven investment.
- Traditional safe-haven assets such as gold also diverted some funds.
4. Market sentiment is extremely pessimistic. The Fear & Greed Index has dropped to 9 (extreme fear), and Google searches for "Bitcoin going to zero" have reached an all-time high. Short-term holders are generally losing money, and there is a lack of new funds entering the market, creating a negative feedback loop.
Correlation analysis: -0.15 divergence
The 30-day correlation coefficient between Bitcoin and the Dow Jones Industrial Average is -0.15, indicating a complete decoupling or even a negative correlation between the two. This divergence suggests that:
- Bitcoin's "digital gold" narrative has temporarily failed.
- Funds tend to favor traditional safe-haven assets when risk appetite declines.
- The crypto market is a self-contained system with reduced correlation to the traditional stock market.
Outlook: Differentiated Market Paths
Bitcoin's short-term outlook :
- Support level: $60,000 (psychological level + technical support)
- Resistance level: $79,000 (actual price)
- ETF fund inflows or new catalysts are needed to break the negative feedback loop.
Conditions for the Dow Jones to continue its strong performance :
- Federal Reserve policy remains stable
- Corporate profitability remains resilient
- Risk appetite continues to favor low-volatility assets.
Key indicators to watch :
- Bitcoin ETF weekly fund flows turn positive
- The Fear & Greed Index has risen back to the neutral range (30+).
- Will US stock volatility (VIX) remain low?
The current market presents a typical "risk-off" environment, with funds rotating from high-beta assets to low-volatility assets. Bitcoin needs to prove its independent value proposition or wait for a change in the macroeconomic environment to end its current "outsider" status.
Data sources: CoinGecko, CryptoQuant, Bloomberg, Reuters; data as of 04:11 UTC on February 24, 2026.