BITCOIN IS STILL WAITING FOR CLARITY
US equities continued pushing into fresh all-time highs yesterday, but crypto remains weak. Bitcoin is still struggling below the $74K region despite the S&P 500 and Nasdaq extending their rallies, highlighting a growing divergence between traditional risk assets and digital assets.
The biggest driver remains the ongoing US-Iran situation. Earlier reports suggested a potential 60-day ceasefire extension, helping ease market fears and pushing oil lower, but traders are still waiting for official confirmation from Iran before fully pricing in a de-escalation scenario.
Historically, Friday has also been Bitcoin’s weakest trading day over the last month, posting an average return of -0.58%. For now, the market remains caught between two very different outcomes. If a deal gets done, risk assets like BTC, ETH, HYPE and SOL could continue pushing higher as geopolitical risk premiums fade. If negotiations stall again, expect volatility across oil, crypto and broader risk markets to return.
BITCOIN HAS COMPLETELY DISCONNECTED FROM THE GLOBAL RALLY
One of the strangest developments of this cycle is how disconnected Bitcoin has become from the broader global market rally.
Since October 2025, nearly every major asset class has moved higher. The KOSPI is up 126.7%, Silver has gained 58%, the Nikkei is up nearly 35%, while the Nasdaq, Russell 2000 and S&P 500 have all posted double-digit gains.
Meanwhile, Bitcoin is down nearly 41% over the same period.
Bitcoin has also slipped to 13th place among the world’s largest assets by market capitalization, a remarkable development for an asset once viewed as the fastest-growing store of value on the planet.
The key question for investors now is whether Bitcoin is simply lagging and setting up for a catch-up move, or whether capital is actively choosing other assets over crypto in the current macro environment.
ETF OUTFLOWS CONTINUE ACCELERATING
Institutional demand continues moving in the wrong direction for crypto.
On May 28, spot Bitcoin ETFs recorded another $229 million in net outflows, extending the current streak to nine consecutive trading days of withdrawals.At the same time, spot Ethereum ETFs saw $121 million in net outflows, marking their 13th straight day of selling pressure.
The continued outflows help explain why both BTC and ETH have struggled to participate in the broader rally seen across traditional markets. Despite US equities trading near all-time highs, institutional capital continues leaving crypto ETFs as investors wait for greater clarity around the US-Iran situation.
BITCOIN DOMINANCE REMAINS ELEVATED
Despite Bitcoin struggling below $74K, capital is still largely staying concentrated in BTC rather than rotating aggressively into the broader altcoin market. Bitcoin dominance currently sits near 59.6%, only slightly below last week’s 60% reading and not far from the cycle high of 65.1% reached earlier this year.
Meanwhile, Ethereum dominance continues hovering below 10%, highlighting how weak capital flows into the second-largest crypto asset remain.
The data reinforces an important point: this still does not resemble a broad altcoin cycle. Investors remain selective, preferring Bitcoin exposure.
ETHEREUM APPROACHES A CRITICAL LEVEL
The daily chart is becoming heavily oversold, this makes the $1,850 region one of the most important levels on the chart. If ETH prints a weekly close below $1,850, downside acceleration becomes increasingly likely as the market would lose a key support zone that has repeatedly acted as a floor during the current cycle.
SOME ALTCOINS CONTINUE BUILDING MOMENTUM
Aave is quietly putting together one of its strongest weeks of the year as growth accelerates across both usage and ecosystem expansion. Aave V4 is now approaching $100 million in deposits, with supply and borrow caps raised for the fifth time since launch as demand continues increasing.
Expansion is also continuing across multiple ecosystems. Avalanche has committed up to $15 million in incentives to support the V4 deployment, while Aave Labs secured FCA registration in the UK for its Push subsidiaries as crypto asset exchange providers.
The growth is also attracting larger players. A whale recently spent $2 million USDT to purchase 24,547 AAVE at an average price of $81.26.
HYPERLIQUID CONTINUES DOMINATING THE PERP DEX MARKET
The platform now holds roughly $9.5 billion in open interest, more than Aster, ApeX, edgeX, Grvt and Lighter combined, which collectively account for around $4.1 billion.
However, some near-term selling pressure is beginning to emerge.
Galaxy Digital recently unstaked 1 million HYPE worth roughly $61 million and has already deposited 500,000 HYPE, worth approximately $30 million, to Bybit and OKX.
While the move does not necessarily mean the entire position will be sold, it represents one of the larger potential sources of supply the market has seen in recent weeks.
From a technical perspective, HYPE continues trading in a strong uptrend after rallying more than 200% from its February lows. Despite recent profit-taking, price remains above the key $51-$52 support region, and holding this level keeps the broader bullish structure intact with the recent highs near $64 remaining the next major level to watch.
DEFI CONTINUES SHIPPING DESPITE WEAK PRICE ACTION
While broader crypto markets remain focused on macro headlines and ETF outflows, development activity across DeFi continues accelerating. This week alone saw several notable launches and upgrades.
Hyperliquid launched outcome markets tied to real-world events, Polymarket rolled out its perpetuals product in beta, Base introduced Base MCP allowing AI agents to connect directly to on-chain accounts and execute trades, NEAR launched confidential on-chain payments, Babylon proposed bringing native Bitcoin collateral to Aave V4, and Euler launched modular lending on HyperEVM.
The broader trend remains clear: infrastructure, AI integration, prediction markets and on-chain finance continue moving forward despite weaker market conditions.
STRATEGY SELLING FEARS ARE STARTING TO GROW
Questions around MicroStrategy’s long-term Bitcoin strategy are resurfacing after the company transferred 411.48 BTC worth roughly $30.3 million to Coinbase Prime.
While the transfer does not confirm a sale, it was enough to reignite speculation across the market. Polymarket now shows an 84% probability that Strategy sells at least some Bitcoin before the end of 2026.
For now, there is no evidence that Michael Saylor is preparing to liquidate the company’s holdings, but the market’s reaction highlights growing uncertainty around one of Bitcoin’s largest corporate holders.
WHAT TO WATCH NEXT
- Clarity around the US-Iran situation remains the biggest catalyst for markets. A confirmed deal could support risk assets
- The weekend is approaching, and with traditional markets closed, crypto could see outsized moves if new geopolitical headlines emerge
- The CME Bitcoin gap era is now effectively over, removing one of the market’s most closely watched weekend signals
- How futures open on Monday will be critical in determining whether markets continue pricing in de-escalation or begin repricing geopolitical risk once again
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