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Why smart money is choosing semiconductors over Bitcoin: What can be done?

Why smart money is choosing semiconductors over Bitcoin: What can be done?

Crypto assets slipped 0.62 per cent, bringing total market capitalisation to US$2.54 trillion. This decline occurred against a backdrop of jubilation in traditional financial markets, where enthusiasm for artificial intelligence propelled major indices to record highs. The divergence tells a story about where institutional money currently flows and reveals a crypto sector struggling to maintain momentum without fresh capital inflows.

The primary culprit behind crypto’s underperformance stems from sustained institutional retreat. US spot Bitcoin ETFs have recorded a seven-day net outflow totalling US$620.64 million, representing a concerning pattern of institutional risk reduction. This persistent capital withdrawal leaves the market vulnerable, stripping away the buy-side support that typically cushions selling pressure from other market participants. While traditional equity markets celebrate semiconductor stocks and AI infrastructure plays reaching trillion-dollar valuations, cryptocurrency’s institutional backers appear content to sit on the sidelines rather than deploy fresh capital.

This institutional hesitancy creates a precarious situation for digital assets. Without the steady demand from ETF inflows that characterised earlier phases of the market cycle, cryptocurrencies become more susceptible to volatility driven by speculative trading and profit-taking. The contrast with traditional markets could not be starker. The S&P 500 surged to 7,519.12, marking a fresh all-time closing record driven by a historic 19 per cent rally in semiconductor stocks. The Nasdaq Composite climbed 1.19 per cent to 26,656.18, reaching a new record high amid explosive demand for AI hardware and computing infrastructure. Even as crypto markets contract, traditional indices expand, suggesting capital rotation away from digital assets toward more established technology plays.

The secondary factors amplifying crypto’s decline reveal the speculative excesses that built up during recent rallies. NEAR Protocol exemplifies this dynamic, plunging 7.4 per cent after an unsustainable 60 per cent weekly rally that pushed its daily Relative Strength Index to an overbought reading of 87. Such extreme momentum readings inevitably trigger profit-taking as traders lock in gains before sentiment shifts further negative. The correction in NEAR demonstrates how quickly euphoria can turn to caution in high-beta altcoins when broader market support wavers.

Compounding the pressure from profit-taking came isolated but significant liquidation events. A large Zcash position worth US$1.48 million was liquidated on the Hyperliquid platform, adding selling pressure to an already weak market. These liquidation cascades often trigger additional selling as leveraged positions unwind, creating feedback loops that exacerbate downward moves. The ZEC liquidation serves as a reminder that beneath modest percentage declines lie substantial losses for individual traders and institutions when markets turn against them.

The technical picture for cryptocurrencies now hinges on critical support levels. The market must hold above US$2.53 trillion, which aligns with the recent swing low, to prevent a deeper correction. A breach of this level would likely trigger a test toward US$2.50 trillion, representing a psychologically important threshold. Bitcoin itself needs to reclaim the US$77,000 level to signal renewed strength, while NEAR Protocol must stabilise above US$2.30 to suggest its pullback remains orderly rather than devolving into a more severe decline.

Adding to the uncertainty surrounding crypto markets is the XRPL v3.1.3 upgrade deadline, which introduces potential network volatility at an inopportune moment. Technical upgrades often create short-term uncertainty as traders assess potential impacts on network performance and token economics. This scheduled event occurs precisely when the market lacks the strength to absorb additional volatility, creating an environment in which negative surprises could trigger outsized reactions.

The broader macroeconomic context provides little comfort to crypto bulls. While President Donald Trump’s comments suggesting peace negotiations with Iran are proceeding have helped ease some geopolitical tensions, ongoing military skirmishes near the Strait of Hormuz keep energy markets on edge. Brent Crude fluctuated between US$96 and US$100 per barrel after a sharp drop earlier in the week, while gold held firm at US$4,518.42 per ounce, suggesting investors remain defensive despite equity market euphoria. The 10-year US Treasury yield eased slightly to 4.49 per cent from recent multi-year highs near 4.57 per cent, but remains elevated enough to offer attractive risk-free returns that compete with speculative assets such as cryptocurrencies.

The path forward for digital assets depends heavily on whether ETF outflows subside and institutional confidence returns. A reversal to positive daily net inflows would signal renewed institutional appetite and provide the foundation for sustainable price appreciation. Without such a shift, crypto markets risk remaining trapped in consolidation patterns while traditional financial markets continue their AI-fuelled advance. The question facing investors centres on whether the current weakness represents a healthy consolidation before the next leg higher or the beginning of a more prolonged period of underperformance relative to traditional assets.

The cryptocurrency market is in a cautious consolidation phase, lacking fresh catalysts and grappling with institutional capital flight. Patience is required.

 

Source: https://e27.co/why-smart-money-is-choosing-semiconductors-over-bitcoin-what-can-be-done-20260527/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

From Dow 50,000 to Bitcoin US$70,000: The leverage cascade that could wipe out gains

From Dow 50,000 to Bitcoin US$70,000: The leverage cascade that could wipe out gains

Dow Jones Industrial Average closed above the historic US$50,000 mark, settling at US$50,284 with a gain of 0.55 per cent or US$276. This milestone reflects more than just numerical progress. It signals a market grappling with competing forces: geopolitical optimism, corporate earnings volatility, and the persistent undercurrent of leverage that defines modern trading.

The S&P 500 advanced to US$7,445.72, up 0.17 per cent, snapping a three-day losing streak, while the Nasdaq Composite edged higher to US$26,293.10 with a modest 0.09 per cent increase as technology momentum balanced earnings pressure. These moves occurred within a highly volatile session, reminding us that record highs often mask fragile foundations.

Geopolitical developments provided a key catalyst. President Donald Trump and Secretary of State Marco Rubio highlighted encouraging signs in US-Iran negotiations mediated by Pakistan. This diplomatic progress helped cool energy markets. Brent crude ticked back to US$104.52 per barrel on Friday due to strict domestic directives from Tehran’s Supreme Leader, though oil futures remain down over four per cent for the week.

That relief from multi-month energy spikes has eased cross-asset inflation concerns, allowing equities to breathe. I view this optimism with measured scepticism. Peace negotiations in volatile regions often follow unpredictable paths, and markets pricing in premature certainty risk sharp reversals. The correlation between geopolitical headlines and asset prices underscores how traditional finance remains reactive to centralised power structures, a dynamic that decentralised systems aim to transcend.

Corporate earnings revealed stark divergence. NVIDIA fell 1.78 per cent as profit-taking eclipsed its blowout Q1 results, which featured an elevated US$0.25 dividend and a new US$80 billion buyback programme. This reaction highlights a market increasingly focused on forward guidance rather than past performance. In contrast, IBM surged 12.55 per cent, lifting the Dow alongside a broader rally in quantum computing stocks sparked by fresh U.S. government-backed investments. This surge reflects capital rotating into sectors perceived as strategic long-term bets.

Meanwhile, Walmart plunged 7.21 per cent after issuing a weaker-than-expected Q2 outlook despite beating Q1 revenue estimates. These moves illustrate a market dissecting nuance: rewarding strategic positioning while punishing even slight missteps in guidance. From my perspective, this earnings season reinforces the intelligence gap in traditional markets. Algorithms and institutional flows react to headlines, but they often miss the structural shifts happening beneath the surface, particularly in decentralised finance, where value accrual operates on different principles.

Global markets tracked Wall Street’s momentum with regional variations. Asia-Pacific equities logged a second consecutive day of gains. South Korea saw consumer sentiment surge at its fastest pace in a year to 106.1, breaking past the 100-point threshold on booming semiconductor exports. Australia’s ASX 200 pointed higher as softer employment data cast structural doubts on further Reserve Bank of Australia rate hikes.

These regional signals matter because they reveal how local economic conditions interact with global liquidity flows. Gold slid slightly to US$4,531.71 per ounce, down 0.25 per cent, continuing a mild 3.5 per cent retraction over the last month from its January all-time high. This modest pullback in a traditional safe haven suggests investors currently favour risk assets, though the proximity to record highs indicates underlying caution persists.

Bitcoin’s behaviour offers a critical lens through which to view this landscape. As of May 22, 2026, Bitcoin trades at US$77,095.76, reflecting a minor downward drift of 0.04 per cent over the last 24 hours. The digital asset continues to experience short-term consolidation within a tightly defined local range. The near-term outlook remains neutral, with a slight bearish bias, amid recent institutional outflows and macroeconomic pressures. The bearish case presents a primary scenario in which Bitcoin struggles to build an aggressive continuation after its recent drop below US$80,000.

If sellers reject the local US$78,000 push during the U.S. trading session, expect the asset to sweep through the lower-liquidity pools around US$75,500 to US$76,000 before forming a stable floor. The bullish case offers a secondary path: if global markets carry over yesterday’s record-breaking stock market momentum, a high-volume breakout above US$78,500 could trigger a swift relief bounce back toward the US$80,000 psychological milestone.

Here lies the crux of my concern and my conviction. A staggering US$22 billion in leverage is currently trapped in the market. If Bitcoin slides slightly further to US$75,500, it risks triggering over US$12.7 billion in forced long liquidations, causing a rapid cascade down to US$70,000. This leverage concentration represents a systemic vulnerability that traditional finance has yet to adequately address.

While equity markets celebrate record highs, the crypto ecosystem operates with transparent, on-chain leverage metrics that reveal fragility invisible to conventional analysis. I have long argued that applying traditional financial tests, such as the Howey test, to decentralised systems misses the point entirely. Bitcoin’s price action today reflects not just supply and demand, but the tension between centralised market structures and decentralised network resilience.

The Memorial Day holiday weekend adds another layer, with bond markets scheduled to close early today at 2:00 PM ET. Reduced liquidity can amplify moves, making the current consolidation in Bitcoin particularly noteworthy. I see this moment as emblematic of a broader transition. Traditional markets gain ground on geopolitical hope and corporate strength, though they remain exposed to leverage shocks and centralised decision-making. Decentralised systems like Bitcoin offer an alternative architecture, but they too grapple with speculative excess and liquidity fragility.

Looking ahead, the path for both traditional and digital assets hinges on how markets digest macroeconomic data, geopolitical developments, and technological progress. The next chapter in this market story will likely be written not by headlines alone, but by the underlying architecture of the systems we choose to trust.

 

Source: https://e27.co/from-dow-50000-to-bitcoin-us70000-the-leverage-cascade-that-could-wipe-out-gains-20260522/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

S&P 500 correlation hits 60 per cent while Bitcoin tests critical support

S&P 500 correlation hits 60 per cent while Bitcoin tests critical support

The crypto market declined 0.65 per cent over the past 24 hours, bringing its total valuation to US$2.22 trillion. Bitcoin led the downturn as institutional sellers aggressively exited positions. Data shows a strong 60 per cent correlation with the S&P 500, indicating a shared macro-driven move across asset classes. Investors observe this connection to understand how traditional finance influences digital assets. Bitcoin’s dominance currently sits at 57.88 per cent, highlighting its role as the market leader.

The core driver remains continued institutional distribution as large holders reduce exposure. This shift means capital leaves the ecosystem at a significant rate. The primary reason for this drop involves sustained institutional outflows from the United States of spot Bitcoin exchange-traded funds. SEC filings revealed net selling of these shares, equivalent to roughly 25,000 BTC, in the fourth quarter of 2025. This unwinding of institutional positions creates persistent sell pressure that weighs heavily on prices. Capital exits the regulated gateway for institutional crypto exposure, undermining a key pillar of recent market support. Traders watch daily ETF flow data closely because a consecutive string of net inflows would stabilise Bitcoin and the broader market.

The secondary reasons for the decline include spillover from a risk-off move in tech equities and persistently negative market sentiment. Readings reflect extreme fear in the market with the Fear and Greed Index at 11. This low number suggests investors feel panic rather than opportunity. Crypto moves with traditional risk assets and does not decouple during these periods. A sell-off in tech stocks contributed to the risk-off environment, and uncertainty around AI advancements, such as the Anthropic Claude launch, fuelled this sentiment. This sentiment compounds the extreme fear in crypto and amplifies the downturn.

Negative macro sentiment and equity weakness work together to push values lower. Investors should watch for stabilisation in major tech indices such as QQQ and SPY as a precursor to relief in crypto. Sentiment shifted from AI disruption fears to AI opportunity after the AMD Meta deal. Battered software stocks also stabilised as investors reconsidered the immediate threat of AI replacing existing enterprise systems. This stabilisation in tech could help crypto if the correlation holds true.

The near-term market outlook depends on Bitcoin defending the US$2.17 trillion total market cap, which marks the yearly low. The Relative Strength Index at 36.96 suggests the market is approaching oversold territory but has not yet reached it. A break below US$2.17 trillion could trigger another leg down toward the 200-day moving average near US$3.07 trillion, according to the provided technical analysis. Conversely, a hold above support combined with a return of positive ETF flows could set the stage for a technical bounce.

The key trigger to watch involves the release of daily United States Bitcoin ETF flow data. A reversal hinges on sustained positive ETF net flows. Without this change, the bearish pressure will likely continue. The downturn fuels itself through institutional capital rotation out of Bitcoin ETFs, and correlated weakness in tech stocks exacerbates the pressure. Technical indicators show the market becomes oversold, but a definitive bottom requires a shift in institutional behaviour.

Broader economic factors also play a critical role in shaping this landscape. Policy uncertainty emerged as a new 10 per cent global United States tariff came into effect on 24 February. Markets appeared to have largely priced in the impact following recent Supreme Court rulings. Consumer confidence supports the S&P 500 after the Consumer Confidence Index rose to 91.2 in February. This number beat economist predictions of 87.4 and provides some stability to equities.

Energy and geopolitics influence the picture as crude oil prices eased by approximately one per cent. Iran indicated readiness to negotiate ahead of nuclear talks scheduled for Thursday. Brent futures settled at US$70.77 per barrel, which helps reduce inflationary fears slightly. Commodities and Treasury yields show mixed signals that affect risk appetite. Gold prices pulled back slightly on 24 February to approximately US$5,150 per ounce as profit-taking occurred after Monday’s record-setting rally. Indian-based prices for 24K gold reached a new high of ₹1.62 lakh per 10 grams on 25 February, driven by continued safe-haven demand. This divergence shows that investors are seeking safety in physical assets as trading volumes adjust in Western markets.

Treasuries indicate steady yield expectations, as the benchmark 10-year United States Treasury yield held near 4.04 per cent. The two-year yield ticked up slightly to 3.459 per cent, which signals short-term rate expectations remain firm. Currency markets show the United States Dollar firmed while the Japanese Yen weakened. The USD/JPY pair pulled above 155.25, reflecting strength in the greenback against major peers.

A strong dollar often pressures risk assets like crypto because it reduces the appeal of non-yielding investments. Sentiment shifted from AI disruption fears to AI opportunity after the AMD Meta deal. Battered software stocks also stabilised as investors reconsidered the immediate threat of AI replacing existing enterprise systems. This stabilisation in tech could benefit crypto if the correlation holds. The business landscape evolves rapidly, and these shifts matter for digital asset valuations. Investors must weigh the tariff impacts against the gains in consumer confidence. The interplay between oil prices and gold demand shows a complex global picture.

Market outlook remains bearish under current conditions. Only a sustained shift in the above-mentioned areas will reverse the current trend. The market waits for clarity on institutional intent and macro stability. Until then, the pressure remains on the downside.

 

Source: https://e27.co/sp-500-correlation-hits-60-per-cent-while-bitcoin-tests-critical-support-20260225/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j