Bitcoin's 23% price increase in March has been attributed to investors seeking shelter in the top cryptocurrency amid bank failures. However, analysts have also called the move a safe haven rally, partly driven by improved risk appetite stemming from hopes for an early Federal Reserve pivot in favor of liquidity-boosting rate cuts. The rising Nasdaq to S&P 500 ratio, which measures the relative difference in valuation between technology stocks represented in the Nasdaq 100 and broader industry stocks from the S&P 500, is also seen as a sign of the rally being driven by improved investor risk appetite. The positive correlation between bitcoin and the NDX/SPX ratio means on days when the ratio rises, bitcoin is more likely to do the same and vice versa.

(By Omkar Godbole)