Bitcoin’s relative strength on Friday may offer a bullish clue for battered software shares — that is, if a past relationship still holds, according to a technical strategist at BTIG.
The signal matters because software has been one of the stock market’s weakest areas in recent weeks. In recent years, crypto and software stocks have often moved in tandem, with both seen as risk-on assets that tend to benefit when investors are more willing to buy into growth and speculation.
If that correlation still holds, bitcoin’s BTCUSD recent strength could suggest that pressure on software stocks may eventually start to ease as well, said Jonathan Krinsky, chief market technician at BTIG, in commentary shared with MarketWatch on Friday.
That would be good news for equity bulls. But there might be another, less promising explanation, according to Krinsky: The correlation between bitcoin and software stocks may simply be starting to break down.
If that is the case, crypto’s gains may have little to say about where software stocks are headed next. It is still too early to know which explanation is right, Krinsky added.
The chart below shows the performance of bitcoin and the WisdomTree Cloud Computing Fund WCLD, which invests in software companies, since 2024.
The contrast between bitcoin and software stocks was on vivid display Friday. The WCLD fund fell 5.2% Friday afternoon to end at $24.09, its lowest close since Jan. 6, 2023, according to Dow Jones Market Data. The ETF was also down for a fifth straight day, marking its worst five-day stretch since the period ended April 8, 2025. Bitcoin, meanwhile, traded as high as $73,311 on Friday, its highest intraday level since March 18.
That split has become especially noticeable since late February, when the Iran war broke out. Since the start of the conflict on Feb. 28, bitcoin has risen 11.5%, while the S&P 500 SPX has fallen 0.9%. Over the same period, the WCLD fund has dropped 12.3%.
The iShares Expanded Tech-Software Sector ETF IGV, another widely watched software-sector gauge, has fallen 9.2% over that stretch. But IGV is not a pure software play, Krinsky noted, because it also includes a number of crypto miners. That makes the recent divergence even more surprising, he said, as crypto-related strength should have helped buttress the ETF against heavier losses, even as software stocks continued to slide.
