Bitcoin shook off a shaky start to the week, bouncing from sub-$62K levels on Monday to reclaim $64,300 by Wednesday morning. The catalyst, or at least the backdrop, was hard to miss: the S&P 500 punched above 7,050 to notch yet another all-time high.

The correlation between risk assets and crypto isn’t always reliable, but this week it showed up right on cue. When equities are printing fresh records, traders tend to rediscover their appetite for digital assets. When they’re not, well, we get Mondays like the one Bitcoin just had.

What the numbers look like

Bitcoin was trading near $64,300 at the time of writing, up roughly 0.4% over the past 24 hours and the same over seven days. Not exactly fireworks, but context matters. Dropping below $62K early in the week had the usual suspects calling for deeper pullbacks.

Ethereum hovered just below $1,900, essentially flat on the day. Solana sat near $74 with a modest 0.2% gain. XRP slipped to $1.06, continuing its quiet slide away from headlines.

The real action came from lower-cap tokens riding the sentiment shift. Uniswap’s UNI token jumped 10% on Tuesday, while Zcash posted a 7% gain over the same stretch. DeFi as a category was the top-performing sector on a seven-day basis, though the actual weekly change was essentially flat, suggesting Tuesday’s pop was more of a recovery from earlier losses than a breakout.

The Fear and Greed Index, which tracks crypto market sentiment, read 27 at the time of writing. That’s firmly in “Fear” territory, barely budging from last week’s reading of 29. In English: prices went up a bit, but the broader market still feels like it’s checking under the bed for monsters.

The Burry factor

Perhaps the most entertaining subplot this week involved Michael Burry, the investor made famous by “The Big Short” for betting against the 2008 housing market. Burry reportedly closed his latest bearish wager against the current equity rally at a 40% loss.

Look, there’s a reason “don’t fight the tape” is a cliche. It’s because it keeps being true. Burry’s track record on macro calls is genuinely impressive, but timing remains the hardest part of any trade. You can be right about the direction and still get carried out on a stretcher because you were early.

His loss is worth noting here because it underscores the broader market dynamic Bitcoin is navigating. The S&P 500 isn’t just going up. It’s going up in a way that’s punishing anyone positioned for a reversal. That kind of momentum has a gravitational pull on risk assets across the board, crypto included.

Bitcoin’s Monday dip below $62K and subsequent recovery looks a lot less random when you consider that equities were doing the same thing in reverse: briefly pausing, then resuming their climb higher. Crypto tends to follow stocks in these environments, with a slight delay and a lot more drama.

What this means for investors

The disconnect between price action and sentiment is the most interesting thing on the board right now. Bitcoin is sitting above $64K, the S&P 500 is at record highs, and the Fear and Greed Index is still printing 27. That’s a number you’d normally associate with corrections, not rallies.

There are a few ways to read this. The optimistic take is that fearful sentiment amid rising prices is textbook “wall of worry” behavior, the kind of setup that historically precedes further upside. When everyone is scared but prices keep climbing, it often means there’s sidelined capital waiting to deploy.

The cautious take is that the fear is justified. Bitcoin’s 7-day performance is essentially flat despite the bounce. Ethereum can’t hold $1,900. XRP is drifting. The bounce in UNI and ZEC on Tuesday was notable, but single-day moves in lower-cap tokens don’t constitute a trend.

Here’s the thing. Bitcoin’s correlation with traditional equities has been inconsistent over the past year, but it tends to tighten during moments of extreme sentiment in either direction. With the S&P 500 at all-time highs and the VIX presumably subdued, the question is whether crypto can sustain this bounce without its own fundamental catalyst, or whether it’s just borrowing conviction from stocks.

Traders should watch the $62K level as near-term support. Monday’s dip tested it and held. A second test with less buying interest would look considerably worse. On the upside, $65K has acted as a resistance zone in recent sessions, and a clean break above it on volume would shift the short-term picture meaningfully.

The DeFi sector’s flat weekly performance despite Tuesday’s spike suggests rotational interest rather than broad-based conviction. If that changes, and tokens like UNI can hold their gains for more than a day, it could signal the kind of risk-on shift that tends to precede bigger moves in the majors. For now, the market is bouncing, sentiment is scared, and Michael Burry is down 40%. Make of that what you will.