Bitcoin Holds Ground While Wall Street Chases AI

Spotlight:

Bitcoin closed the week trading near $73,400, navigating a period of broader market recalibration as macroeconomic dynamics and shifting institutional flows created a more cautious backdrop for digital assets. The world's largest cryptocurrency edged approximately 5% lower over the past five trading days, whereas traditional equity markets moved in the opposite direction, with the S&P 500 reaching a fresh all-time high of 7,568 on Friday. This contrast reflects a broader rotation of capital toward AI-related technology and semiconductor stocks, a theme that has drawn significant investor attention in recent weeks.

Micron, America's leading semiconductor manufacturer, surged dramatically following a presidential endorsement in late May, with its market capitalization climbing from roughly $850 billion to over $1 trillion in just five trading sessions, underscoring the scale of enthusiasm around the AI investment cycle. This dynamic has created a more selective environment for risk assets globally, with crypto markets navigating the rotation from a position of relative isolation.

The most closely watched development of the week was the sustained deceleration in spot Bitcoin ETF demand. According to Coinglass data, Bitcoin ETFs registered nine consecutive days of net outflows through May 28, totaling $2.8 billion. The pace has been escalating: outflows stood at $1 billion in the week beginning mid-May, climbed to $1.26 billion the following week, and reached $1.30 billion in the most recent period. Wednesday alone saw $733 million leave the space, the worst single-day outflow of 2026 and the fifth largest on record, with BlackRock's IBIT accounting for nearly $528 million of that figure.

The cumulative effect has pushed Bitcoin ETF year-to-date flows into negative territory for the first time in 2026. In our view, this trend reflects a broader directional reassessment by institutional participants rather than routine profit-taking or hedging activity, with regional geopolitical tensions, including the ongoing conflict in the Middle East, also cited as a contributing factor to the shift in risk appetite.

On-chain data provides further context to the current environment. Whale balances, defined as wallets holding between 1,000 and 10,000 BTC, are contracting year-on-year at the fastest rate in 2026, mirroring patterns observed during the 2022 cycle. Dolphin balances, those holding between 100 and 1,000 BTC, have similarly decelerated below their 365-day moving average, a threshold that is historically associated with periods of sustained price consolidation. The long-term holder supply reached a record high of15.8 million BTC during the week, a reading that reflects an absence of new buyers entering the market rather than active accumulation.

Short-term holder supply has declined materially from approximately 6.4 million BTC in December to around 4.2 million BTC today, with roughly 900,000 BTC of that decline attributed to Coinbase reserves aging into long-term holding status. On prediction markets, participants have assigned a 63% probability that Bitcoin's next directional move will lead it toward $84,000, although that figure has fallen sharply from the 92% recorded as recently as May 6, highlighting the measurable decline in near-term bullish conviction.

The CME Group also made a notable structural move, launching round-the-clock trading for its cryptocurrency futures and options suite through its Globex platform, bringing its schedule closer in line with the always-open nature of spot crypto markets. The exchange reported close to $3 trillion in notional trading volume for its crypto derivatives in 2025, with contracts tied to Bitcoin, Ether, XRP, and Solana now accessible around the clock. The expanded hours are designed to offer market participants greater flexibility to manage exposure during off-hours events that have historically driven sharp price swings. On the regulatory front, the proposed CLARITY Act continued to draw attention, with JPMorgan CEO Jamie Dimon expressing concern that certain provisions could create an uneven playing field between traditional financial institutions and crypto firms, a debate that is likely to remain active in the months ahead.

Looking Ahead:

The primary macro catalyst for digital asset markets this week will be Friday's nonfarm payrolls report for May, with consensus expectations calling for 93,000 jobs added, against a prior reading of 115,000. Given the active debate around whether AI-driven automation is affecting labor markets, the headline figure and any accompanying commentary will be closely watched, as a resilient labor picture may continue to support the equity rotation that has drawn capital away from digital assets in recent weeks. Earlier in the week, Tuesday's Job Openings and Labor Turnover Survey and Thursday's initial jobless claims data, previously at 215,000, will offer preliminary readings on labor market conditions ahead of Friday.

On the earnings front, Broadcom's results on Wednesday will serve as a bellwether for AI infrastructure spending and semiconductor demand, and the company's forward guidance warrants particular attention from market participants tracking the competitive dynamics between asset classes. Palo Alto Networks and CrowdStrike also report on Tuesday and Wednesday, respectively, adding further color to the technology-spending environment. Bitcoin's technical positioning near the $73,000 to $74,000 range will remain in focus throughout the week, and if ETF flows begin to stabilize, a measured recovery in sentiment could follow in the weeks ahead.