Russell 2000 hits a five-year high, why is Bitcoin still in a correction? Federal Reserve signals liquidity release

【Crypto World】An interesting phenomenon: the Russell 2000 Index has hit a five-year high, but Bitcoin is still in the doldrums — currently 27% below its October peak.

This is a bit unusual. Historically, this hasn’t been the case. Looking back, in 2021 and 2024, when small-cap stocks hit new highs, Bitcoin’s price peaks often followed. The two usually move in sync.

So what’s happening now? Analysts explain that the Federal Reserve’s rate cut cycle is brewing, which will boost risk assets including cryptocurrencies. Plus, the outlook for small-cap stocks’ profits is also good, so funds may flow back into higher-risk assets. Additionally, the Fed’s bond purchase program is ongoing, meaning market liquidity will continue to increase — generally good news for risk assets.

So the issue isn’t with the fundamentals; it might just be that the timing hasn’t aligned yet.