#MarketSentimentToday

Bitcoin and software stocks are breaking up — and history says a major crypto move is coming

What to know:

Since April 10, the iShares Expanded Tech-Software Sector ETF (IGV) has rallied 36% and reclaimed its 200-day moving average, signaling a return to a long-term uptrend despite earlier concerns over AI disrupting traditional software businesses.

Bitcoin's 20-day rolling correlation with IGV has fallen to 0.58, a level last seen before major bitcoin rallies in late 2023 and mid-2024.

Previous episodes of similarly low correlation were followed by bitcoin significantly outperforming in the months ahead.

Since May 14, bitcoin and IGV have sharply diverged. IGV has gained roughly 12%, while bitcoin has fallen about 10%, marking one of the largest disconnects between the two assets in recent years.

Bitcoin and IGV reached all-time highs in October 2025 before entering significant drawdowns, with bitcoin declining roughly 50%, while IGV around 37%. The software sector's weakness was largely driven by growing fears that artificial intelligence would disrupt traditional software business models. The "SaaS apocalypse" narrative gained traction across markets, triggering broad selling pressure in software names such as Oracle (ORCL), Microsoft (MSFT), and Palantir (PLTR).

The 20-day rolling correlation between bitcoin and IGV has fallen to 0.58. The last notable periods of similarly low correlation occurred in October 2023, when bitcoin was trading near $25,000 before rallying to $70,000 over the following six months, and again during the summer of 2024, shortly before bitcoin surged toward $100,000 following President Trump's election victory.

Historically, such periods of low correlation have not lasted long. Either bitcoin eventually catches up to software stocks, or IGV's recovery proves a fakeout. For now, the latter scenario appears less likely given IGV's strong momentum and its move back above the 200-day moving average.