Bitcoin, Major Cryptos Lag 9-Week Stock Rally as ETF Inflows Cool
0h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
bitcoinethereum
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
Major cryptocurrency prices, including Bitcoin and Ethereum, underperformed a sustained nine-week rally in the S&P 500, according to market data. This divergence emerged as demand for spot Bitcoin exchange-traded funds cooled from their initial launch fervor. As of early morning UTC today, Bitcoin traded near $73,524, down 0.2% over the previous 24 hours. The S&P 500 index, by contrast, recorded its longest weekly winning streak since the first quarter of 2023. The shift highlights a potential decoupling of crypto assets from traditional risk markets, a dynamic not seen since early 2024.
The current crypto stagnation against a rising stock market is notable. Historically, Bitcoin and the S&P 500 have exhibited variable but positive correlation, particularly in risk-on and risk-off environments. The last sustained decoupling of this magnitude occurred in Q1 2024. That period followed the launch of spot ETFs, which briefly saw crypto trade independently on its own product-specific catalysts.
The broader macro backdrop features stabilizing long-term Treasury yields and a steady U.S. dollar. Brent crude oil held near $92 per barrel, supported by geopolitical risk premiums. This stabilization in traditional commodities did not translate into momentum for digital assets.
The immediate catalyst for the underperformance is a clear cooling in institutional ETF inflows. Net new capital flowing into U.S. spot Bitcoin ETFs dropped to its lowest level in nine weeks. This slowdown removed a primary price support that had buoyed the market since January. Concurrently, traditional equities found support from resilient corporate earnings and receding fears of an immediate economic slowdown.
Concrete data illustrates the performance gap. The S&P 500 gained approximately 15% over its nine-week rally. In the same period, Bitcoin's price appreciation was negligible, hovering in a tight range between $70,000 and $75,000. Dogecoin's market capitalization stood at $15.66 billion, while XRP's 24-hour trading volume was $2.36 billion.
The disparity extends to fund flows. Daily net inflows into the ten U.S. spot Bitcoin ETFs averaged below $100 million for the week, a sharp decline from the $500+ million daily averages seen in March and April. This slump in demand occurred even as the products' collective assets under management remained above $55 billion.
A comparison table shows the 24-hour performance snapshot of key assets versus the longer-term trend:
| Asset | Price | 24h Change | 9-Week Trend |
|---|---|---|---|
| S&P 500 Index | ~5,250 | +0.5% | +15% |
| Bitcoin | $73,524 | -0.20% | ~+2% |
| Ethereum | ~$3,800 | -0.5%* | ~+5% |
| XRP | $1.35 | +2.35% | ~-3% |
*Ethereum price estimate based on prior close; exact live data not provided.
This table underscores the short-term crypto rebound in tokens like XRP and Dogecoin does not offset the significant medium-term underperformance versus equities.
The divergence signals a maturation of the crypto market's drivers. It is no longer a simple proxy for tech stock risk appetite. Sector-specific flows into and out of the spot ETF wrapper now exert greater influence. This benefits pure-play crypto asset managers and custodians but pressures publicly traded crypto mining firms, which often trade as equity beta plays.
Second-order effects are emerging. Capital appears to be rotating within the digital asset space toward newer protocols and restaking narratives, as evidenced by isolated rallies in tokens like Hyperliquid's HYPE. Traders are seeking alpha outside the large-cap stagnation. The limitation of this analysis is the historical tendency for correlations to reassert during market stress. A sharp equity selloff could still trigger a cascade in crypto liquidity.
Positioning data from derivatives markets shows a buildup in neutral-to-bearish options strategies on Bitcoin. Large holders, or whales, have been net distributors into price strength above $74,000. Flow is moving toward structured products offering yield on stagnant assets and into select alternative Layer 1 and DeFi tokens.
Two specific catalysts in June will test this decoupling. The U.S. monthly CPI report on June 12th will challenge the disinflation narrative supporting equities. The Federal Open Market Committee meeting on June 18th will provide updated rate projections. A hawkish shift could pressure both asset classes but may hit the more rate-sensitive tech equities first.
Key technical levels are defining the range. Bitcoin faces strong resistance at $75,500, a level it has tested and failed multiple times since March. Support rests at the $69,000 level, which coincides with the short-term holder cost basis. A sustained break above $75,500 would require a resurgence in ETF inflows exceeding $300 million daily. A break below $69,000 could trigger a test of the $65,000 support zone, where significant institutional buying occurred in Q1.
The correlation has weakened significantly but is not broken. The 30-day rolling correlation coefficient between Bitcoin and the S&P 500 fell to 0.2 in late May, down from 0.7 in early April. A coefficient of 1 implies perfect lockstep movement, while 0 implies no relationship. This decline to a weak positive correlation indicates independent drivers are currently dominant, but a major macro shock would likely cause the relationship to tighten again rapidly.
Slowing inflows are a normalization, not a rejection. The initial post-launch surge represented pent-up institutional demand. Current flows reflect a steady-state allocation process from wealth managers and registered investment advisors. This phase is critical for establishing a stable, non-speculative base of holders. It mirrors the maturation path of gold ETFs, which saw volatile initial flows before becoming a permanent allocation tool.
The current consolidation is occurring at a much higher market capitalization and institutional participation level. Previous cycles, like the 2018-2020 bear market, saw prices decline 80%+ from all-time highs with minimal institutional presence. Today, Bitcoin has held above 90% of its March 2024 all-time high for over two months amidst $10+ billion in net ETF inflows. This indicates a stronger foundational support level, though it does not preclude a future correction.
The cooling of spot Bitcoin ETF inflows has temporarily severed crypto's link to the equity rally, refocusing the market on its own capital rotation dynamics.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Trade the assets mentioned in this article
Trade on BybitSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.