ETF outflows and macro fear put Bitcoin and Ethereum under pressure

ETF outflows and macro fear put Bitcoin and Ethereum under pressure

Bitcoin trades at US$74,326.85 after a 2.02 per cent decline over 24 hours, underperforming a slightly softer broader market. This move reflects a clear shift in institutional sentiment rather than retail panic. A single dark pool transaction involving 29.2 million shares of BlackRock’s iShares Bitcoin Trust, valued at US$1.289 billion, triggered the initial selloff on 26 May. That block trade signalled large-scale de-risking by sophisticated players who now face mounting macro uncertainty. The consequence became visible the following day when US spot Bitcoin ETFs recorded US$333.6 million in net outflows, extending the withdrawal streak to seven consecutive sessions. When the most reliable source of demand reverses direction, price discovery inevitably follows a lower path.

The correlation between Bitcoin and the Nasdaq-100 ETF, currently running at 65 per cent, confirms that crypto no longer trades in isolation. Macro drivers now dominate short-term price action. Renewed tensions between the United States and Iran pushed the Crypto Fear and Greed Index down to 34, firmly in fear territory. That sentiment shift accelerated a cascade of leveraged long liquidations totalling US$142.24 million within 24 hours, with long positions accounting for 92 per cent of that figure. Markets hate uncertainty, and the current environment offers plenty. Traders positioned for continuation now face the reality that institutional capital moves first and asks questions later.

Technically, Bitcoin broke below an ascending channel and now tests the 38.2 per cent Fibonacci retracement level near US$74,500. The seven-day RSI reading of 27.42 suggests oversold conditions, which often precede a short-term bounce. Oversold does not mean reversed. The critical support cluster ranges from US$74,000 to US$74,500. A decisive break below that zone opens the path toward US$73,000. A reclaim of the pivot point at US$74,309 would signal early stabilisation and could fuel a rebound attempt toward US$76,500. Traders should watch this range closely, but they must also recognise that technical levels matter less when institutional flows dominate the tape.

Ethereum faces even steeper headwinds, down 2.72 per cent to US$2,019.19 over the same period. The primary driver remains persistent capital flight from US spot Ethereum ETFs, which have now seen 11 consecutive days of net outflows totalling over US$506 million. That streak represents the longest withdrawal period in 2026 and signals fading institutional conviction. When regulated products lose their appeal, the market loses its most stable buyer. Ethereum now trades without that structural support, leaving it more vulnerable to spot market selling and broader risk-off moves. The Ethereum Foundation needs an overhaul – but that is another story for another day.

The situation worsens when we examine on-chain activity. Ethereum’s network utility has collapsed, with median transfer size and fees down 80 to 90 per cent from their 90-day baseline. That decline indicates a lack of organic, price-supportive demand. While developers debate roadmap priorities, users vote with their wallets, and right now, they are not paying to use the network. This creates a double headwind for ETH. It moves like a risk asset in a fearful macro environment, even as its own ecosystem fails to generate a bullish counter-narrative. The technical structure reflects this weakness. ETH trades below all key moving averages, with the 23.6 per cent Fibonacci retracement level at US$2,074 now acting as near-term resistance. A daily close above that level would suggest downside exhaustion, but a break below the recent US$2,014 low could accelerate selling toward the US$1,800 to US$1,900 support zone.

Global equity markets present a confusing backdrop. US indices notched fresh record closes recently, with the Dow Jones Industrial Average rising 182.60 points to 50,644.28, the S&P 500 edging up 1.24 points to 7,520.36, and the Nasdaq Composite gaining 18.55 points to 26,674.73. AI and tech momentum remains strong, as evidenced by Snowflake shares rising as much as 35 per cent in after-hours trading following a revenue beat and a US$6 billion multi-year commitment with AWS. Crypto diverges from this strength. That divergence matters. It suggests that while traditional markets celebrate corporate earnings and AI narratives, digital assets grapple with structural challenges of their own. Brent Crude oil tumbling to a five-week low near US$94.29 a barrel reflects shifting geopolitical expectations, but it has not provided the risk-on tailwind crypto traders hoped for.

Federal Reserve policy remains the ultimate macro wildcard. Governors Lisa Cook and Neel Kashkari recently signalled their readiness to raise rates if sticky inflation persists, helping keep bond yields stable. That hawkish tone weighs on all risk assets, but crypto feels the pressure more acutely due to its higher beta profile. The upcoming US PCE inflation report due on 30 May will serve as the next major catalyst. If the data shows cooling price pressures, markets could stage a relief rally. If inflation proves persistent, the Fed’s hands remain tied, and risk assets likely face further pressure. Traders should position accordingly, but they must also recognise that macro data only sets the stage. Institutional flows write the script.

We built these networks to operate outside traditional financial systems, yet price action now hinges on ETF flows, Fed policy, and institutional block trades. That reality does not invalidate decentralisation, but it does demand honesty about where we stand. Institutional participation brings liquidity and legitimacy, but it also imports traditional market dynamics, including correlation, leverage, and sentiment cycles. The current selloff shows what happens when those forces align against price. It also highlights the importance of organic, on-chain demand. When fees and transfer activity collapse, as we see on Ethereum, the market loses its fundamental anchor.

Beyond the charts, the deeper question remains whether institutional flows will stabilise or continue to dominate price discovery. Watch for a reversal in daily ETF flow data. That signal, more than any technical level, will indicate whether institutional sentiment has turned. Until then, expect volatility, respect the macro backdrop, and remember that markets reward those who prepare for multiple outcomes rather than betting on a single narrative.

Source:
 

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”.

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Are institutions ditching Bitcoin for AI-themed products?

Are institutions ditching Bitcoin for AI-themed products?

Bitcoin sits at US$76,638.55, and I still see a range play. The price action reflects a market digesting competing forces rather than breaking into a new trend. Institutional capital is not fleeing digital assets but rotating with purpose. Money is moving out of mainstream Bitcoin and Ether ETFs and into AI-themed funds and select altcoin products. This shift tells a nuanced story about risk appetite, narrative momentum, and the search for growth in a macro environment that favours selectivity over broad exposure.

Recent flow data makes this rotation unmistakable. Between 18 and 22 May, US spot Bitcoin ETFs recorded about US$1.26 billion in net outflows. Ether ETFs lost roughly US$216 million over the same window. At the same time, Solana, XRP, and Hyperliquid HYPE products attracted inflows of about US$15.6 million, US$22 million, and US$72.4 million, respectively. Reports show total BTC and ETH ETF redemptions reached nearly US$2.7 billion over two weeks.

These numbers do not signal a retreat from crypto. They show capital reallocating within the asset class toward ecosystems with idiosyncratic growth drivers, such as network adoption and derivatives activity. The flagship funds remain massive. CMC aggregate data still puts Bitcoin ETF assets at around US$106.22 billion and Ether ETF assets at nearly US$13.8 billion. The system is large but is currently experiencing a net trickle-out from the core holdings.

Outside crypto, the AI infrastructure trade commands intense attention. An AI-linked memory chip ETF, DRAM, gathered more than US$6.5 billion of assets within 27 trading sessions after its April launch. It surpassed US$10 billion within 30 sessions. That pace makes it one of the fastest-growing and most traded ETFs in the United States. Institutions express AI conviction through familiar equity wrappers rather than more volatile coins. Hedge funds have ramped up their exposure to tech and AI stocks, reinforcing this preference. The narrative around chips and model-training infrastructure offers a compelling growth story that aligns with current macro expectations. Managers appear to use crypto price rebounds to trim exposure to rate-sensitive benchmark assets such as BTC and ETH while keeping risk on the table through altcoins and AI themes.

Macro expectations have shifted toward higher-for-longer interest rates. This backdrop shapes how institutions position across digital assets and equities. When rates stay elevated, investors favour assets with clear near-term catalysts and visible adoption curves. Within crypto, products tied to more sustainable ecosystems fit that bill. They offer exposure to specific network effects and derivatives activity that can drive outsized returns even when large caps face headwinds. The rotation reflects enthusiasm for growth narratives in AI infrastructure and higher beta altcoins, not a total exit from digital assets. Risk appetite has not vanished. It is being reallocated toward perceived higher growth and more targeted narratives, both inside and outside crypto.

Global markets provide important context for this flow dynamic. On Tuesday, May 26, 2026, equities worldwide pare early gains as Middle East geopolitical developments compete with optimism over an interim diplomatic breakthrough. US equity-index futures trade higher by 0.6 per cent, with S&P 500 futures up one per cent and Nasdaq 100 futures up 1.4 per cent compared to Friday’s close. This follows an eight-week consecutive winning streak for the S&P 500. Investors return from the Memorial Day holiday, focusing on upcoming PCE inflation and GDP figures.

In the Asia-Pacific, benchmarks show mixed performance. Japan’s Nikkei 225 surged 2.87 per cent to 65,158.19 points, driven by technology and component manufacturers. Australia’s S&P/ASX 200 slid 0.4 per cent to 8,656.6, weighed down by losses in large banks and real estate players. Hong Kong’s Hang Seng gained 0.86 per cent, tracking recovery in local property markets and optimism around Chinese tech listings. These moves matter because crypto increasingly correlates with traditional risk assets. When tech equities rally, crypto often follows. When macro uncertainty rises, correlations can tighten further.

Energy and commodities add another layer. Brent Crude trades around US$97.54 to US$98.00 per barrel after volatile swings tied to US-Iran diplomatic developments. WTI Crude hovers near US$91.00 per barrel. Spot gold rose 0.75 per cent to US$4,550.18 per ounce amid lingering safe-haven demand. Iron Ore edged down slightly by 0.11 per cent to US$109.67 per tonne.

The US Dollar Index prints a touch stronger at 99.34 against its Group-of-10 peers. Cash trading of US Treasuries resumed with a minor rally, leaving the 10-year Treasury yield at 4.55 per cent as investors await core inflation indicators. These variables influence institutional positioning across all risk assets. A stronger dollar and sticky yields can pressure rate-sensitive holdings. Geopolitical tensions can boost safe havens while creating volatility that benefits high-beta names.

For Bitcoin and Ethereum, sustained ETF outflows could cap upside or increase sensitivity to negative macro surprises. These vehicles remain a primary channel for institutional demand. Persistent redemptions signal caution among large allocators. The DRAM ETF’s explosive growth demonstrates how powerful the AI infrastructure narrative can be when wrapped in a familiar vehicle. Concentration risk rises if narratives fade or liquidity reverses. Investors paying for growth today expect delivery tomorrow.

Practical signals deserve close monitoring. Watch daily net flows into BTC, ETH, and major altcoin ETFs. Track relative performance between crypto ETFs and AI equity ETFs. Observe changes in the probability of rate cuts or hikes implied by Treasury yields and Fed funds futures. If macro conditions ease and AI enthusiasm broadens back into digital assets, flows could rotate again, potentially back toward BTC and ETH. The interplay between these factors will determine whether the current shift becomes a lasting regime change or a temporary tactical adjustment.

Breakouts require either a macro catalyst that reignites broad institutional demand or a narrative breakthrough that pulls capital back into the flagship assets. Until then, selective exposure and careful flow monitoring offer the clearest path forward.

 
Source: 
 

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”.

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Oil crashed 5% but Bitcoin jumped US$4K, altcoins surged 2X harder: What’s driving this?

Oil crashed 5% but Bitcoin jumped US$4K, altcoins surged 2X harder: What’s driving this?

Global financial markets opened with a distinct shift in sentiment as breakthrough optimism surrounding US-Iran peace negotiations triggered a relief rally across risk assets. Because of the Memorial Day holiday, United States equity and bond markets remain closed today, and crypto markets continue trading without pause.

Bitcoin rebounded sharply from lows near US$74,000, trading roughly between US$77,000 and US$78,000 following reports that Washington, Tehran, and regional partners had drafted a short memorandum of understanding. This framework reportedly aims to extend a ceasefire, reopen the Strait of Hormuz, and initiate focused nuclear and sanctions talks. The broader crypto market capitalisation recovered more than US$70 billion in response, illustrating how rapidly digital assets react to geopolitical headlines even when traditional financial centres pause for observance.

The core mechanism driving this move remains fundamentally macroeconomic rather than crypto-native. Progress toward peace reduces the immediate risk of war, which can lower oil prices and ease inflationary pressure on global risk assets. The prospect of reopening the Strait of Hormuz, a critical chokepoint carrying around one-fifth of global oil, directly influenced commodity markets.

Brent crude dove over five per cent, falling below US$100 a barrel to reach its lowest level in over two weeks. This oil price decline, paired with a softer US dollar as defensive demand waned, created a favourable backdrop for assets like Bitcoin that have increasingly traded in correlation with traditional risk indicators. The relief rally reflects a market pricing in reduced tail risk, though the deal’s underlying fundamentals remain untested.

Altcoins demonstrated their characteristic higher beta to this macro relief, often amplifying the moves seen in Bitcoin. AI and high narrative tokens such as NEAR, Worldcoin, Ondo, and Hyperliquid posted double-digit daily gains in some reports, significantly outpacing Bitcoin during the bounce. Derivatives data added fuel to the move, showing several hundred million dollars of short liquidations during the spike as bearish positions were forced to close.

This technical squeeze magnified the initial headline-driven rally, creating a feedback loop where price action itself became a catalyst. The episode underscores a critical reality for portfolio construction. Crypto now trades as a risk asset tied to geopolitical and energy shocks, meaning macro headlines can move digital asset portfolios as powerfully as protocol upgrades or regulatory news from within the ecosystem.

Significant uncertainty clouds this optimistic price action despite the positive headlines. Iranian outlets have characterised some US statements as incomplete or primarily for domestic political consumption, while key issues like nuclear limits and sanctions relief remain substantively unresolved. Senior US politicians have also publicly criticised the framework, highlighting the domestic political risk surrounding any final agreement.

For crypto traders, this means the current rally rests entirely on an unfinished framework. If talks stall or regional fighting resumes, the market could rapidly rotate back into fear positioning, potentially reversing recent gains with equal speed. Analysts note that Bitcoin remains below its prior 2026 highs, with persistent ETF outflows and elevated yields still creating a challenging background tape for sustained upward momentum.

The broader macroeconomic context adds layers of complexity to this geopolitical relief rally. Federal Reserve Governor Christopher Waller recently pushed back on easing timelines, stating that inflation is not moving in the right direction. This hawkish commentary sent a reality check through fixed-income markets, keeping 10-year Treasury yields elevated even as risk assets rally.

Compounding this tension, US consumer confidence numbers collapsed to a record low of 44.8, while year-ahead inflation expectations jumped to 4.8 per cent. This divergence highlights structural cost-of-living concerns that persist beneath corporate market highs. Crypto markets must now navigate a conflicting signal environment in which geopolitical de-escalation provides a tailwind, while stubborn inflation and restrictive monetary policy continue to exert a headwind on liquidity-sensitive assets.

Global equity performance offers a mixed picture that further informs the crypto narrative. Wall Street markets are shuttered for Memorial Day, but S&P 500 futures trade higher on global peace optimism, extending the index’s strong eighth consecutive weekly winning streak even as it sits just 0.3 per cent below its mid-May record high. Asia-Pacific markets showed divergence, with tech shares initially drawing strength from the Nasdaq’s prior close while broader regional indexes like the ASX 200 faced downward pressure as investors balanced easing energy sectors against hawkish central bank commentary.

In Singapore, the Ministry of Trade and Industry maintained the city-state’s 2026 GDP growth forecast at two per cent to four per cent, while first-quarter GDP growth was notably revised upward to a strong six per cent year-on-year. Meanwhile, safe-haven gold rallied as macro investors looked past higher short-term bond yields, suggesting not all capital is rotating into risk assets despite geopolitical optimism.

This market action reinforces a critical framework for understanding crypto’s evolving role in global finance. Digital assets now serve as high-resolution sensors for geopolitical and macroeconomic shifts, with altcoins acting as an even more sensitive gauge. The rapid US$70 to US$80 billion recovery in total market value demonstrates the asset class’s liquidity and responsiveness, but also its vulnerability to headline-driven volatility.

Traders and builders alike must recognise that crypto no longer operates in an isolated technological silo. Its price discovery increasingly reflects a complex integration of traditional risk indicators, energy market dynamics, and diplomatic developments. This convergence demands a more sophisticated analytical approach that weighs on-chain metrics against oil price trajectories, derivatives positioning against diplomatic communiqués, and narrative momentum against central bank rhetoric.

The path forward requires disciplined attention to concrete developments rather than headline noise. Key variables to monitor include any concrete signing or failure of the peace framework, specific guidance on sanctions relief and frozen Iranian assets, the directional trend in oil prices following the initial drop, and how rate markets digest subsequent economic data. These factors will determine whether the current move evolves into a sustained trend reversal or remains a short-lived relief bounce.

Until the deal structure, sanctions pathway, and oil market response become clearer, crypto markets will likely remain highly sensitive to new headlines. Altcoins, with their higher beta profiles, will likely continue to amplify both upward and downward moves, creating opportunities and risks for participants. This environment rewards those who maintain strategic flexibility while avoiding overexposure to any single narrative outcome. Memecoins will follow suit, too.

 
Source:
 

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”.

j j j