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Macroeconomic trends should be creating the perfect storm for cryptos. But true to form, the asset class isn’t following the rules. 

Bitcoin and ether faltered Thursday after an early-morning rally, dipping around 4.8% and 4.7%, respectively. 

Bitcoin (BTC) came close to breaking into the $38,000 range Thursday before falling into the red, effectively ending Wednesday’s rally. BTC is now down a little over 2% over the week, but still up close to 25% in the past 30 days. 

Stocks also dipped Thursday but recovered to trade relatively flat at time of publication. The S&P 500 and Nasdaq Composite indexes each lost as much as 0.5% earlier in the trading session before paring losses. 

Bitcoin’s correlation with the Nasdaq hit 0.51 Thursday, a rebound after falling to -0.69 at the end of October, according to data from TradingView. A coefficient of one means the corresponding assets are completely aligned, while a negative-one reading signals the opposite. 

Analysts say the drop in equities is likely a correction from Tuesday’s Consumer Price Index (CPI) data release-fueled rally, which saw the S&P 500 climb 2%. 

“A 2% rally in the S&P 500 is usually only justified when we get a real, tangible and substantial positive surprise, but that didn’t happen [Tuesday],” Tom Essaye, founder of Sevens Report Research, said. “What did happen was the CPI report likely eliminated the possibility of another rate hike and caused investors to expect rate cuts much sooner (and much larger) than previously anticipated.” 

Bitcoin, which has flipped from green to red and back again all week, has left analysts flummoxed. 

“Bitcoin is starting to seem like a rebellious teenager…which is actually fitting when you consider its relative age and its disruptive mission,” said Noelle Acheson, author of the ‘Crypto is Macro Now’ newsletter. “But in marketspeak, its rebellion is manifesting by not reacting as traditional lore says it should.” 

Easing treasury yields – the ten year yield is down about 3% this week – coupled with optimism that the Federal Reserve will pause rike hikes should be enough to push bitcoin to its next key level, Acheson said. Yet, that is not what appears to be happening. 

Putting too many eggs in the macroeconomic basket tends to not bode well for crypto investors, said Acheson. 

“Bitcoin can be moved by macro considerations,” she added. “Or it can be moved by ETF speculation. Or it can be moved by any of a number of other factors. We can talk about ‘correlations’ all you want, but they tend to be backward looking and changeable.

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