Bitcoin has fallen nearly 50% from its October peak, yet MARA Holdings and HIVE Digital Technologies have recently flashed golden crosses, signaling potential bullish momentum for crypto equities. The world's largest cryptocurrency dropped from approximately $123,641 on Oct. 6, 2025, to around $62,533, representing a loss of more than $61,000 per coin. Despite this drawdown, shares of MARA and HIVE are displaying technical strength often viewed by traders as a precursor to recovery.

Bitcoin remains deep in drawdown

The scale of Bitcoin's decline remains significant, with the cryptocurrency trading nearly 50% below its October high. According to TradingView data, Bitcoin is down about 29% year-to-date and nearly 38% over the past year. Historically, moves of this magnitude have weighed heavily on crypto-linked equities, particularly miners whose revenues are tied to Bitcoin prices.

MARA and HIVE show technical strength

MARA shares are trading near $14.43 and recently formed a golden cross as the stock's 50-day moving average climbed above its 200-day moving average. A similar pattern has emerged at HIVE, where shares are trading around $4.51. For technical traders, golden crosses are interpreted as evidence that momentum is improving and that investors are positioning for a potential recovery.

Investors eye future catalysts

The divergence raises questions about whether crypto stocks are pricing in a recovery before Bitcoin itself. Investors may believe that bad news has already been priced into mining stocks or are focusing on future catalysts such as improving industry economics and lower competition. HIVE has expanded into high-performance computing and AI-focused infrastructure, providing exposure beyond cryptocurrency mining.

Markets often move ahead of fundamentals, and the same dynamic can play out in crypto-related equities. While the signals do not guarantee higher prices, they suggest the market may be becoming more optimistic about the outlook for crypto-related equities despite Bitcoin's ongoing weakness.

Bitcoin may be positioned for a catch-up rally if the Federal Reserve refrains from raising interest rates, according to Bitwise Chief Investment Officer Matt Hougan. Since the start of the Iran conflict in late February, U.S. equities have gained roughly 9%, while Bitcoin has slipped 1% and gold has fallen 20%. Hougan noted that the divergence comes as investors increasingly price in the possibility of tighter monetary policy amid inflation concerns, with one-year Fed rate expectations rising about 60 basis points.

Hougan argued that markets may be overestimating the likelihood of future rate hikes. While the Fed left its current benchmark federal funds rate unchanged at a range of 3.5% to 3.75%, Bank of America predicts rates to be raised by 75 basis points before the end of 2026. "Our base case is for the Fed to hold off on rate hikes," Hougan said. "If we're right, Bitcoin's price may catch up with stocks."

Because Bitcoin and gold do not generate yield, higher interest rates increase the opportunity cost of holding those assets relative to cash and bonds, weighing on demand. Over the past month, Bitcoin's price has fallen roughly 19%, extending its three-month decline to about 13%. While AI-related spending has fueled gains in equities, Bitcoin and gold have lagged partly due to fears that central banks will need to tighten policy further to combat inflation.

Unlike gold, Hougan views Bitcoin as serving two functions within portfolios. He described Bitcoin as both a scarce digital commodity that acts as a long-term store of value and a public blockchain network that provides exposure to growth in the broader crypto economy. That combination gives Bitcoin characteristics of both gold and growth equities, potentially making it an attractive portfolio diversifier. "Bitcoin can act as a portfolio diversifier that, at current levels, appears attractively priced," Hougan said.