Bitcoin Sell-Off Defies Market Expectations
Bitcoin (BTC) unexpectedly fell to $102,000 despite a US-China tariff agreement that boosted stock markets. The cryptocurrency had recently hit a three-month high of $105,720 before retreating, leaving traders questioning the divergence from traditional markets.
Key Factors Behind Bitcoin’s Decline
✅ Shift to Risk-On Assets – Investors moved capital into stocks as trade tensions eased, reducing demand for alternative assets like Bitcoin.
✅ Strong Correlation With Stocks – Bitcoin’s 83% 30-day correlation with the S&P 500 suggests it’s tracking equities rather than decoupling.
✅ Gold Also Tumbles – Safe-haven gold dropped 3.4%, signaling reduced demand for inflation hedges amid improving risk sentiment.
✅ US Dollar Strength – The DXY Index hit a 30-day high, pressuring dollar-denominated assets like Bitcoin.
Institutional Bitcoin Holdings Raise Concerns
MicroStrategy purchased an additional 13,390 BTC (worth ~$1.4B), bringing its total holdings to 1.19M BTC (~6% of supply).
Critics like Peter Schiff warn that MicroStrategy’s aggressive buying could lead to forced selling if Bitcoin’s price stagnates.
However, the company has secured $21B in stock and debt financing, reducing near-term liquidity risks.
What’s Next for Bitcoin?
🔹 Macroeconomic Data in Focus – Upcoming US CPI report (May 13) could reignite volatility.
🔹 ETF Demand Remains Strong – $2B inflows into Bitcoin ETFs (May 1-9) suggest institutional support persists.
🔹 Critical Support Levels – A drop below $100,000 remains unlikely unless ETF flows reverse.
Final Outlook
While Bitcoin’s short-term dip contradicts the bullish stock market reaction, its long-term trajectory still hinges on:
✔ Institutional adoption (ETFs, corporate buyers)
✔ Macro trends (Fed policy, dollar strength)
✔ Supply dynamics (Halving effects, miner activity)
