Bitcoin Breaks Correlation with U.S. Equities Amid Multi-Faceted Headwinds

Bitcoin extended losses and decoupled from the U.S. stock rally, ending its two-month strong correlation with mainstream equities. This divergence is not driven by broad risk aversion; capital is simply rotating out of Bitcoin and into AI-themed assets.

On May 28, Bitcoin failed once again to break the 78000 resistance and extended its losses, trading lower at around 73000–74000 amid persistent selling pressure. In contrast, U.S. equities remained near record highs, with the Nasdaq 100 and Russell 2000 holding recent gains led by tech and AI stocks. As the decoupling widens, markets now see even lower odds of a near-term bullish reversal for BTC.

source：tradingview

Key Pressures Weighing on Bitcoin

1. Selling from Crypto Miners

Listed mining firms are offloading BTC reserves to fund AI infrastructure expansion. TeraWulf plans to build an extra 1 gigawatt high-performance computing facility in Kentucky. With AI offering brighter growth prospects, rising supply pressure keeps prices in check.

2. Large On-Chain Transfers

On May 25, Trump Media & Technology Group transferred 2650 BTC, worth roughly 250.5 million dollars, to a crypto exchange. The company previously held 11542 BTC at an average cost above 118500 dollars. Though exchange transfers do not guarantee immediate sales, the move has fueled worries of further liquidation.

3. Stalled U.S. Crypto Legislation

Two pivotal bills remain stuck in Congress. The PARITY Act, which proposes tax exemptions for mining and staking rewards, has no scheduled hearing. The Clarity Act, meant to clarify regulatory powers between SEC and CFTC, is still pending a Senate vote with no clear timeline. Slow progress has erased near-term regulatory optimism.

4. Tepid Liquidity Conditions

The Fed’s total assets have stayed flat at around 6.7 trillion dollars since April, dashing expectations of expanded Treasury purchases and monetary easing. Higher oil prices have stoked inflation concerns, leaving the central bank little room to loosen policy further.

Risk appetite stays robust across global markets. AI semiconductor and infrastructure stocks lead gains: SK Hynix and Micron each topped a 1 trillion dollar market cap, while many AI-linked shares surged over 20 percent in a week. Investors are clearly favoring AI plays over Bitcoin.

Near-Term Outlook & Key Watchpoints

Analysts expect Bitcoin will struggle for a strong breakout above 82000 in the short run. Investors will closely track three core factors:

- Additional selling from mining companies

- Progress of U.S. digital asset legislation

- Changes to the Fed’s liquidity stance

For now, Bitcoin trades independently under multiple headwinds, with no sign of reconnecting to the rally in U.S. equities.