More people are betting against stocks in the U.S., and this is leading to a new discussion about how Bitcoin fits into the worldwide financial system.
XWIN Japan, a contributor to CryptoQuant, suggests that if market conditions improve later this year, we could see more large investors putting money into Bitcoin. This is because the market is becoming more reliant on strategies to reduce risk, automated trading by artificial intelligence, and borrowed money.
Wall Street Hedging and Bitcoin’s Changing Behavior
In a recent market analysis, XWIN Japan explained that the increasing number of short positions on US stocks doesn’t automatically mean investors are becoming pessimistic. It seems hedge funds are building protective positions while still maintaining their investments in the market.
According to a recent report from a cryptocurrency research firm, hedge funds are taking on significantly more risk, with leverage reaching 293%. This coincides with a record number of bets against the S&P 500 and indicators suggesting it’s taking longer to cover those short positions.
A lot of the recent market stress seems to be linked to a few very large, highly valued companies dominating the AI sector. At the same time, investors are increasingly betting against companies in less successful areas and smaller businesses.
This economic environment is important for Bitcoin because, in the past, its price has often moved with the stock market, especially during times of crisis. For instance, when the stock market dropped in 2020 due to the COVID-19 pandemic, Bitcoin’s price also fell – it didn’t behave as a safe investment people turn to in difficult times.
According to XWIN, the connection between traditional markets and Bitcoin began to change in 2025. While the S&P 500 has remained fairly stable, Bitcoin has experienced bigger price fluctuations driven by factors like demand for Bitcoin ETFs, leveraged trading, and the movement of funds within the crypto world.
The analysis suggests Bitcoin could evolve into a unique asset – one that will still be affected by broader economic trends, but increasingly driven by its own specific factors.
According to XWIN, if the Federal Reserve lowers interest rates, the dollar weakens, and more money starts flowing into exchange-traded funds (ETFs), Bitcoin could start being seen as a place to easily access funds, rather than just an investment that moves with the tech market.
As a researcher tracking the crypto market, I observed some volatility over the weekend. Bitcoin initially dropped to around $74,000, but then quickly recovered, rising above $77,000. This rebound seemed to coincide with news reports indicating progress towards a possible ceasefire agreement between the US and Iran, suggesting a link between geopolitical developments and crypto asset pricing.
As of today, Bitcoin had fallen slightly below $77,000, according to CoinGecko, putting it nearly 30% lower than it was a year ago.
On-Chain Activity Cools While Traders Watch Key Levels
As Bitcoin goes through this current period of consolidation, I’ve been observing a significant decrease in network activity. Crypto analyst Ali Martinez recently pointed out that the number of active addresses on the network dropped almost 40% in just two weeks – it went from around 821,000 down to 494,000. This is a key metric I’m watching closely.
He believes that when trading slows down and prices move sideways, it usually means short-term traders are selling, while long-term investors are still holding onto their assets.
Traders are betting more and more that the price of Bitcoin will soon move significantly, as shown by recent increases in funding rates – reaching a two-month high of 0.4%. Data from the blockchain also reveals that large Bitcoin holders have been moving around more than 18,000 BTC while the price has remained relatively stable.
According to Martinez, Bitcoin is facing resistance around $78,000 and support near $76,000. He believes a break above $78,000 could lead to a price of $85,000, while a drop below $76,000 might cause it to fall to the $60,000s.
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2026-05-26 20:50