US Stock Market at All-Time Highs…Why is Bitcoin Struggling?

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The reasons cited for Bitcoin (BTC) struggling below $75,000 despite the strong US stock market are 'liquidity outflow' and decreased network participation. With ETF outflows and slowing on-chain activity occurring simultaneously, the market is focusing on the possibility of structural demand weakening rather than a simple correction.

According to cryptocurrency media outlet Bitcoinist on May 30 (local time), XWIN Research Japan analyzed in a recent report why the US stock market has risen near its peak while Bitcoin remains in a bearish trend. The outlet explained that although both assets are classified as risk assets, their actual driving forces for upward movement have diverged completely.

Currently, the US stock market is rising, driven by the earnings growth of artificial intelligence (AI) companies like NVIDIA, large-scale share buybacks, and ETF inflows. In contrast, Bitcoin, lacking corporate earnings or cash flow, relies on new liquidity and new participant inflows as key variables for price increases. The problem is that market funds have recently been moving into the stock market and out of Bitcoin.

Indeed, Bitcoin spot ETFs recorded large net outflows in late May. The outlet analyzed that Bitcoin's recovery also stopped from the moment ETF demand, which had served as a channel for institutional fund inflows, turned bearish. On-chain data also showed the same trend. According to CryptoQuant, active addresses have continued to decrease since 2024, and trading activity and network participation have also slowed. The outlet diagnosed that in a bull market, price increases and increased network activity move together, but currently, the opposite phenomenon is occurring.

Bitcoin's price is currently under pressure, trading around $73,600. The rally in May, which saw it break above $82,000, met strong resistance near the 200-day moving average of $80,000. The market currently views the $72,000-$74,000 range as a key support level. This range acted as resistance throughout March and April before becoming support after breaking through in mid-April.

Trading volume remains relatively low compared to the sharp drop in February. This means that panic selling has not yet occurred, but at the same time, strong buying at low prices is also absent. The outlet analyzed that for Bitcoin to rebound, a recovery in Bitcoin spot ETF inflows, an increase in on-chain activity, an improvement in the Coinbase premium, and a weaker dollar are needed. Conversely, it warned that if a daily close below $72,000 occurs, further declines to the next major demand zone around $65,000 could be possible.

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