Bitcoin has maintained a value above $19,000 despite currency woes that have decimated stocks and legacy markets this week.

Bitcoin plummeted to $18,600 and then bounced up to $20,000. This came amid volatile markets where the S&P 500 Index also suffered losses. The index is on track for three quarter-quarter losses. It’d be the first time the index has registered this kind of performance since 2009.

BTC/S&P 500

Dylan Leclair, a senior cryptocurrency analyst, said that if stocks suffer another sell-off, and the tumbling continues in face of Fed tightening, and concerns about a recession. He believes the market could experience a BTC outperformance compared to equities.

According to the analyst, Bitcoin’s “relative strength” against legacy indices has been encouraging, pointing to a BTC/S&P 500 chart.

Encourage relative strength from the orange currency against legacy indices.

While a prolonged “decoupling”, which is extremely unlikely at this stage of the game, relative outperformance can be a good start.

We are all watching FX, global bonds and equities to see where the next move is. pic.twitter.com/Enfbl0vn2R

— Dylan LeClair 🟠 (@DylanLeClair_) September 29, 2022

While he doesn’t expect the “decoupling” to be long lasting given broader market conditions, he still thinks the benchmark cryptocurrency could master a decent run against the index. What investors might have to watch out for, he tweeted, is what happens next within the legacy financial markets – equities, FX and global bonds.

The analyst however warns of a potential sell-off for Bitcoin should there be a “huge illiquidity event.” He said:

“Still convicted in my view of a legacy system vol event coming – it’s clear that liquidity tide is drawing out. BTC/USD exchange rate won’t be insulated from a huge illiquidity event, because nothing except USD & vol will.”

Bitcoin was trading at $19260 on Friday morning ET (09:45 ET), which was in the green but up 1.2% for the week. The S&P500 opened higher and was at 3,634, which is more than 1.4% lower in the past five trading days.