The United Kingdom’s asset regulator, the Financial Conduct Authority (FCA), has proposed a new standing for investment funds which would allow them to have up to 10% of their assets in crypto exchange traded notes (ETNs), in a move geared towards opening regulated funds to digital asset exposure.
This proposal was published as part of the FCA’s 52nd quarterly consultation paper, with the consultation window closing on July 13.
FCA proposal
Portfolio managers at authorized funds could be allowed to hold crypto ETN positions so long as the total allocation stays at or below 10% of the entire asset holding, according to the published proposal. Fund managers would also need to show that any ETN holdings align with the fund’s stated investment objective and risk profile.
The FCA has set a 10% cap to limit risk exposure and prevent funds from being pushed into “restricted mass market investment” territory at higher allocation levels, which could complicate their regulatory classification as retail products.
Based on the proposal plan, funds will be permitted to hold crypto ETNs listed on recognized investment exchanges in the UK. Products traded in the EU and other global markets that satisfy existing market criteria for eligibility are also expected to qualify for listing.
Possible proposal benefactors
The proposal covers a wide scope of financial institutions and investment funds, but still has clear boundaries on who it applies to and who it doesn’t. Some investment schemes serving professional investors and individuals with a high net worth would face no allocation cap.
Long-term asset funds and non-UCITS retail schemes structured as alternative investment funds would be excluded entirely from holding crypto ETNs.
However, the FCA’s stance on direct crypto ownership has not changed in the slightest. Ownership of cryptocurrency by these funds is still off the table. Funds can gain exposure only through listed and approved crypto ETNs.
The FCA said it would revisit that position after assessing how its forthcoming crypto regulatory framework and client-asset protection rules affect fund structures.
UK crypto ETN market
The recent proposal comes after a sequence of shifts in the regulatory market, with the FCA lifting its ban on retail investors accessing crypto ETNs in October 2025, a change that reopened a market that had been closed for four years. Financial institutions, including 21Shares, Bitwise, WisdomTree, and BlackRock, then listed physically backed Bitcoin and Ether products on the London Stock Exchange.
In April 2026, British investors became allowed to hold crypto ETNs in Innovative Finance ISAs after the HMRC had previously blocked new acquisitions within conventional stocks-and-shares ISAs.
The current proposal addresses what the FCA sees as a regulatory gap, as individual retail investors could already access crypto ETNs directly but the funds managing their money could not.
Jon Allen, head of innovation and operations at the Investment Association, called the proposal “a practical step” that would let funds gain crypto exposure through regulated ETN products.
This move from the UK FCA is on track with recent trends across Europe, where regulators in Germany, Switzerland, and the Netherlands have already allowed similar financial products for investment funds.
Ethereum’s slide to its lowest level in more than a year is testing the Wall Street trade that brought the token deeper into institutional portfolios.
Data from CryptoSlate shows that the second-largest cryptocurrency fell to as low as $1,506 during the last 24 hours, its weakest level since April 2025, extending a broad crypto selloff that has already drained leverage from derivatives markets and pushed traders toward defensive positioning.
Crucially, the downswing is not confined to ETH’s spot market as the digital asset is also experiencing a broader deterioration across regulated ETF flows, centralized exchange deposits, and derivatives positioning.
This situation comes at a time when the broader crypto market sentiment has significantly weakened, with Bitcoin falling toward a four-month low near $60,000, while Ethereum has erased much of its market support.
ETF outflows weaken Ethereum’s institutional bid
The pressure has been most visible in the ETF market, where the products that gave institutions a regulated way to buy Ethereum have turned into a source of persistent outflows.
Data from SoSoValue shows that spot ETH ETFs have recorded four straight weeks of withdrawals totaling more than $870 million.
Ethereum ETFs Weekly Flows (Source: SoSoValue)
During that period, the funds posted a 17-day outflow streak interrupted by only one day of inflows, when investors added $19.3 million.
As a result, sosoValue data show total spot Ethereum ETF assets have declined more than 70% from their $30 billion peak to $8.71 billion, which is equal to about 4.01% of Ethereum’s circulating market capitalization.
The reversal has weakened one of the main arguments behind Ethereum’s institutional expansion. The ETFs were expected to broaden access to the asset, deepen liquidity, and give traditional investors a cleaner way to gain exposure without handling tokens directly.
However, that demand has softened as ETH’s price moved lower and investors have reduced risk across digital assets.
Exchange inflows add another supply risk
As institutional demand-side forces abated, the physical supply available on liquid trading platforms experienced a sudden and substantial expansion.
CryptoQuant data show Ethereum inflows to trading platforms climbed to about 2.24 million ETH in a single day, the highest level in four months. Binance accounted for more than 1.16 million ETH of those inflows, representing more than half of the total.
Ethereum Exchange Inflows (Source: CryptoQuant)
This surge in active supply can be seen in high-profile on-chain movements that served as glaring evidence of the liquidity migration.
Notably, a wallet linked to Ethereum co-founder Joseph Lubin awoke after more than three years of dormancy, mobilizing 80,001 ETH, valued at roughly $122 million.
The massive transfer epitomized the broader trend where long-inactive capital breaks from cold storage to seek out active trading venues and liquid architectures amid the mounting market stress.
Large inflows to trading platforms do not automatically mean investors are selling. They can reflect market-making activity, collateral movement, internal transfers, or portfolio restructuring during periods of stress.
However, traders watch the metric closely because coins held on exchanges are easier to sell or use in derivatives activity than coins sitting in private wallets.
The timing has made the increase harder to dismiss. Ethereum was already trading near $1,580 when the inflows accelerated, while Bitcoin had fallen toward $59,000. That combination suggested investors were moving assets during a marketwide reset rather than during a routine period of repositioning.
If exchange deposits remain elevated, the market could face additional short-term volatility.
Derivatives deleveraging deprives market of rebound capital
The velocity of the current crypto market decline has been accelerated by an extensive deleveraging cycle across leveraged futures platforms.
As spot valuations rapidly deteriorated, automated liquidation engines on major exchanges systematically closed out underwater long positions to protect clearinghouse integrity, amplifying organic selling pressure.
Data analyzed by Santiment illustrates that this liquidation wave effectively flushed out a massive block of speculative capital over a narrow four-day window:
Bitcoin Total Open Interest: Contracted by approximately 25%, dropping to $23.2 billion, which is its lowest operational aggregate since early April.
Ethereum Total Open Interest: Decreased by 13%, settling at $9.8 billion, a structural low point not seen since March.
Bitcoin and Ethereum Open Interest (Source: Santiment)
While this aggressive deleveraging leaves the underlying market structurally healthier by purging speculative excess and over-extended margin, it introduces an immediate liquidity vacuum.
The severe drop in open interest demonstrates that the speculative floor has thinned, leaving the market highly vulnerable to further spot pressure due to the lack of immediate leveraged capital available to front-run a classic V-shaped recovery.
Consequently, retail crowd sentiment has cratered to its most pessimistic footing since mid-February.
The firm noted that social metrics reveal an exponential increase in the phraseology of capitulation, with organic social discussions increasingly pairing terms like “Bitcoin” and “altcoins” alongside terminal descriptors such as “dead,” “finished,” “over,” and “ending.”
Traders hedge for a break below $1,500
The buildup of stress across ETFs, exchange flows, whale cost bases, and leveraged markets has shifted attention to ETH’s options market, where traders are paying more to protect against another leg lower.
Deribit data show demand for downside protection has increased sharply. The ETH options put-to-call premium rose to 3.7 times on Friday and has shown consistent excess demand for put options since Monday. Put contracts give holders the right to sell at a set price, making them a common hedge when traders expect further losses or want protection against a disorderly move.
ETH’s open interest has clustered around several downside strikes. Traders have built roughly $108 million in open interest around the $1,500 strike, while the $1,400 strike has attracted about $75 million. The $1,000 strike has drawn about $78 million in positioning.
Those levels do not mean the market expects ETH to fall to $1,000 immediately. Instead, they show that traders are paying for protection after several support signals weakened at the same time.
BlockScholes data show the shift has also appeared in volatility pricing. ETH short-dated implied volatility has jumped from a year-to-date low of 36% to 67%, signaling that traders now expect larger near-term price swings.
The move has been accompanied by a sharper skew toward out-of-the-money puts. The seven-day ETH options skew has moved to about -14%, compared with roughly -3% to -4% in late May. Additionally, the demand for puts has also spread across 7-day, 14-day, 30-day, and 90-day maturities.
That broadening shows traders are not just hedging a single event or one short-term move. They are preparing for the possibility that Ethereum’s weakness could extend if ETF outflows continue, exchange inflows stay elevated, and large holders remain below key cost levels.
The next test is whether $1,500 becomes a floor or a trigger. A stabilization in ETF flows and a decline in exchange deposits could help ease pressure.
Without that, the options market’s focus on downside strikes may become the clearest signal of where traders expect the next phase of the selloff to concentrate.
Crypto pundit Ash Crypto has drawn attention to speculations about how institutions could be crashing the Bitcoin price on purpose. This comes as the Bitcoin ETFs continue to record massive outflows, which have caused this latest decline for the leading crypto.
Pundit Highlights Speculations Of Institutions Purposely Crashing Bitcoin Price
In an X post, Ash Crypto claimed there were rumors that institutions are purposely crashing the Bitcoin price so they can buy at lower prices before the Clarity Act is signed into law. The pundit noted that a similar pattern had played out in August 2022, when BlackRock filed for a private Bitcoin trust, and BTC later dropped about 36% before forming a bottom.
Following that, BlackRock then filed for a spot Bitcoin ETF, and the Bitcoin price later surged by 95%. Ash Crypto noted that BTC hit a new high in January 2024, when spot ETFs were approved. He added that insider institutions are repeating the same strategy with the Clarity Act narrative.
The Bitcoin ETFs have largely contributed to the decline in the Bitcoin price, with these funds recording outflows in 13 out of the last 14 trading days. During this period, their total net assets have dropped from around $104 billion to $82 billion. Strategy co-founder Michael Saylor also cited these outflows in his comments on the BTC crash.
In an X post, Saylor said that the capital markets are funding the AI buildout at a historic scale, with $400 billion deployed over six months, while BTC ETFs have seen $4 billion in outflows since May 14, pressuring the Bitcoin price. He declared that this is a capital rotation, not a BTC impairment, while adding that volatility creates opportunity.
BTC Simply Following The Four-Year Cycle
Crypto analyst Benjamin Cowen has reiterated that the Bitcoin price is simply following the four-year cycle. He also mentioned that the bull case for BTC is that if the economy is still doing well after the four-cycle low is put in, then it should have no problem starting its next bull market. Based on historical trends, the bear cycle low could happen by the fourth quarter of this year.
Meanwhile, Cowen noted that midterm years always feel really bad for crypto, and that this one is even worse, since the Bitcoin price topped on apathy. He opined that Bitcoin will survive, although many crypto assets may die out. Crypto analyst Ali Martinez warned that BTC is not looking good at the moment and that the leading crypto could drop to the next major area of support between $54,000 and $50,000.
At the time of writing, the Bitcoin price is trading at around $63,100, down in the last 24 hours, according to data from CoinMarketCap.
Standard Chartered’s head of digital assets research, Geoff Kendrick, has outlined three specific scenarios that stand between Bitcoin and a new market low — a sobering analysis arriving as Bitcoin trades near $62,562, its lowest level since the February lows, and ETF outflows reach historically severe levels, according to a CoinDesk report.
The analysis from one of the most closely watched institutional voices in crypto arrives as the broader market absorbs a brutal string of data points. US spot Bitcoin ETFs recorded $1.42 billion in outflows for the week ending May 29 — the third-worst weekly result in history — with total outflows over the preceding three weeks exceeding $4.21 billion, per Bitcoin Foundation’s tracking of ETF flow data.
Bitcoin has simultaneously fallen to the lower boundary of the Power Law corridor, a long-term valuation model that plots price against time on a logarithmic scale, with the Power Law Oscillator dropping to 4.4% — meaning Bitcoin is priced cheaper than 95.6% of historical readings relative to its long-term trend.
The Three Conditions For The Bitcoin Price
According to CoinDesk’s report of Kendrick’s analysis, the three “ifs” that could tip Bitcoin toward a new market low center on the intersection of macro forces, institutional flows, and market structure — rather than any crypto-specific catalyst. The first is whether ETF outflows continue accelerating beyond current levels, removing the institutional demand layer that has been the primary structural support for Bitcoin since January 2024.
The second is whether the Federal Reserve’s June and July meetings deliver a hawkish surprise — specifically if the dot plot fails to signal rate cuts, removing a key tailwind the market has been pricing in. The third is whether Bitcoin dominance — currently above 60% — breaks below the 52–54% range, a level that historically signals broad-based crypto selling rather than Bitcoin-specific rotation, per Standard Chartered’s prior framework as reported by CoinDesk.
The Contrarian Signal Inside The Warning
Kendrick’s three-ifs framework is not a straightforward bear call — it is a risk-mapping exercise from an analyst who remains constructive on Bitcoin’s year-end trajectory. According to CoinDesk’s report, Kendrick told clients directly: “I think when we look back at the end of 2026 with BTC at $100k and ETH at $4k we will say this was the buying zone we all wanted.” The bank’s year-end Bitcoin target remains $100,000, per its February 2026 revised forecast — a level that would require a 60% recovery from current prices.
The observation that Bitcoin is trading near its 200-week simple moving average is central to Standard Chartered’s framing. Previous bear markets ended around the same moving average, per CoinDesk’s chart analysis — a historical pattern that, while not a guarantee, supports Kendrick’s view that the market may be closer to a bottom than a breakdown.
This development marks a critical juncture for Bitcoin in the current cycle. Standard Chartered’s three-condition framework offers both a warning and a map — and the next few weeks of ETF flow data, Fed signaling, and dominance metrics will determine which scenario actually plays out.
As of this writing, Bitcoin trades at around $62,562, testing levels that have historically preceded either a sustained recovery or a final capitulation flush.
Cover image from Grok, BTCUSD chart from Tradingview
Michael Saylor conceded that the recent Bitcoin selloff reflects a rotation of capital toward AI rather than weakness in the pioneer crypto itself.
He pointed to roughly $4 billion in Bitcoin ETF outflows since May 14, with the king of crypto trading near $64,000 at the time, down about 4% on the day and nearly 49% below its October 2025 record.
Analysts peg 2026 capital budgets at the largest US tech firms above $600 billion. That scale gives his rotation argument some footing.
He cast the ETF redemptions as temporary repositioning, not a structural problem. MicroStrategy holds 843,706 Bitcoin at an average cost near $75,702, per Strategy’s record Bitcoin holdings.
That average now sits well above the market price. With Bitcoin near $64,000, the 843,706 coins are worth about $54 billion against a cost basis near $63.9 billion.
That leaves MicroStrategy about $10 billion underwater on the largest corporate Bitcoin treasury. The loss is unrealized, yet it pressures a stock that trades as a leveraged proxy for the token.
The strain is already visible. A June 1 filing shows Strategy sold 32 BTC to fund preferred-stock dividends, its first sale since 2022. The move was small, yet it showed those obligations now drawing on the same balance sheet.
“Capital markets are funding the AI buildout at historic scale: ~$400B over 6 months. Bitcoin ETFs have seen ~$4B of outflows since May 14, pressuring $BTC. This is a capital rotation, not a Bitcoin impairment. Volatility creates opportunity,” Michael Saylor indicated.
The framing carries an irony, give Michael Saylor rode the same dot-com wave that once broke his company.
MicroStrategy peaked at $333 on March 10, 2000, the day the Nasdaq Composite also topped out. The stock then fell from $260 to $86 on March 20, a one-day drop above 60%.
MicroStrategy (MSTR) Stock Performance in 2000. Source: TradingView
That restatement erased about $66 million in revenue and turned reported profits into losses. Saylor and two executives later paid roughly $11 million to settle fraud charges, without admitting wrongdoing.
Analysts at PFR Capital now explore a possibility where Saylor could rattle markets again.
“In March 2000, MicroStrategy…changed its revenue recognition method…investors started doubting the revenue, profits, accounting quality, and so on of other companies. What happened after that, everyone knows. So you could say MicroStrategy single-handedly crashed the entire market. 26 years have passed. Will MicroStrategy be able to replay its market-crashing magic? Let’s wait and see,” PFR Capital’s Jayson Hu posed.
The parallel is imperfect, however, since the 2000 collapse stemmed from accounting. The current bet rests on transparent, on-chain purchases.
— The Kobeissi Letter (@KobeissiLetter) June 4, 2026
Competing Reads on the Outflows
However, not everyone shares Saylor’s calm. CNBC’s Mad Money host Jim Cramer weighed in as the selling spread. He had touted doomed “new economy” stocks days before the 2000 top.
“Saylor suboptimal move roiling Crypto. Some wags pondering it was only up in the 90s because of Saylor… Seems extreme but it is all i hear,” he noted.
Bloomberg analyst Eric Balchunas described the stretch bluntly, while noting lifetime ETF inflows still top $55 billion. May marked the heaviest Bitcoin ETF outflows of 2026.
BAD TIMES: Bitcoin ETFs in a big step back mode.. $4.4b out over past month which sent the YTD number negative again (it had worked hard to get positive too). That said, some silver lining: $IBIT & a few others STILL positive YTD (unreal) and total net lifetime is still +$55b… pic.twitter.com/VzaijnWhx8
American asset management company Grayscale has launched its long-awaited Hyperliquid staking ETF (HYPG) on Nasdaq, while charging a 0.29% fee that officially makes it the cheapest U.S. listed HYPE ETF.
This comes amid the HYPE token’s record highs, regardless of Bitcoin’s market stumble over the past few weeks.
Grayscale HYPG third HYPE ETF in three weeks
HYPG is the third Hyperliquid ETF product launched for U.S. markets in less than a month. 21Shares debuted its fund (THYP) on Nasdaq on May 12 with a 0.30% fee. Bitwise followed with its own BHYP ETF launch three days later on the New York Stock Exchange, initially waiving fees entirely before stepping up to 0.34% upon the end of the promotional window.
Grayscale’s 0.29% fee comes in as the lowest among all these other HYPE ETFs, according to the firm’s announcement.
These consecutive launches within a short time of each other reflect a fee war playing out in real time. The fee difference between the Grayscale and 21Shares ETFs is almost negligible, however, it still signals that these ETF issuers see enough demand to compete aggressively for early market share.
HYPG as an asset
Unlike a plain, regular, crypto ETF that simply holds a token, HYPG participates in Hyperliquid’s staking mechanism. Staked HYPE helps to secure the network, and the rewards earned after fees and expenses flow into the ETF’s net asset value. Grayscale cited a historical average staking yield of roughly 2.2% per year, according to data from stakingrewards.com covering May 2025 through April 2026.
HYPE surges, Bitcoin falls
HYPE hit a record near $76 earlier this week and traded just 3% of that level today at about $72 at the time of writing, according to TradingView data. Over the same stretch, Bitcoin was sliding below $67,000, almost 3% in 24 hours.
The recently launched HYPE ETFs have captured this momentum perfectly. THYP gained about 75% since its May 12 debut, and BHYP has risen by approximately 60% from its May 15 listing, per Stocktwits data. Hyperliquid-linked ETFs pulled in more than $132 million in cumulative net inflows during May, a period when both Bitcoin and Ether ETFs experienced record outflows, the total opposite.
HYPE’s market capitalization now sits around $16.1 billion, enough to push past Dogecoin (DOGE) and into 9th on the list of the top 10 cryptocurrencies by market value.
Hyperliquid’s growth and why
Hyperliquid launched in 2024 as a decentralized perpetual futures exchange and has since expanded into smart contracts, tokenized assets, and wider on-chain market infrastructure. The protocol generated about $857 million in revenue during 2025, according to Grayscale’s press release.
Almost 99% of this revenue was, however, directed toward HYPE buybacks, a model that ties network usage directly to the HYPE token’s value.
“The launch of HYPG on Nasdaq reflects our conviction that Hyperliquid represents something genuinely differentiated in the digital asset landscape, a protocol built to support onchain trading and market activity at scale,” Krista Lynch, Grayscale’s senior vice president of capital markets, said in the company’s announcement.
Retail interest has also surged alongside institutional adoption. Stocktwits data showed the number of traders following HYPE increased more than 1,600% over the past seven days, with sentiment on the platform registering as “extremely bullish.”
XRP is giving traders a contradiction that separates flow data from actual market control.
The token has been trading around the low-$1.30s after hitting its weakest level in roughly 15 weeks, even as two data points bulls often treat as supportive moved in the other direction.
Spot XRP ETFs have continued to attract money, with cumulative inflows around $1.42 billion, while late-May exchange-flow data showed more than 25 million XRP moving off exchanges after a prior inflow.
That combination would normally invite a simple accumulation case. Less XRP on exchanges can mean less immediately available sell-side supply. ETF inflows can show that regulated wrappers are still drawing capital.
Yet price action points to something colder: neither signal has been enough to stop sellers from setting the marginal price.
CryptoSlate’s XRP market page showed the asset near $1.30 on June 1, with a market cap around $80.87 billion and roughly $1.62 billion in 24-hour volume.
The token remains a top-five crypto asset by market value, but that size has not protected it from a market where rebounds are still being sold.
ETF demand remains indirect
The ETF side of the story has the clearest bullish potential.
SoSoValue data puts late-May spot XRP ETF inflows at roughly $11.8 million on May 29, taking cumulative net inflows to about $1.4 billion. Investor demand for XRP exposure through regulated products has continued during the latest drawdown.
ETF inflows are separate from immediate control of the spot market. They show that capital is entering a wrapper. They do not prove that enough aggressive buying is hitting exchange order books at the moment sellers are pressing sell orders through the market.
XRP has already spent much of May showing the same disconnect.
A recent analysis of XRP’s bullish signals found that ETF inflows, exchange withdrawals, and rising ledger activity had built a constructive setup, while price action still failed to follow.
The June 1 low moves that setup forward from a stalled bullish case to a clearer test of whether those flows can support the token before traders give up on the support zone.
Signal
Bullish case
Offsetting pressure
Spot XRP ETF inflows
Regulated-product demand remains visible
Wrapper demand has yet to overpower spot selling
Late-May exchange outflows
Less XRP may be available for immediate selling
The flow followed a large exchange inflow and covers a short window
XRP still near the top of market rankings
Liquidity and attention remain deep relative to most altcoins
The token is still near a 15-week low
Prior accumulation signals
Bulls can argue that supply is being absorbed
Price keeps treating rebounds as sell zones
The table shows the risk in reading ETF demand in isolation. Each constructive signal has a plausible bullish interpretation, but each also has an offsetting pressure that carries more weight for price right now.
What traders need to ask now is whether those flows are strong enough, direct enough, or immediate enough to change who controls spot trading.
Santiment showed a 22.80 million XRP exchange inflow before the balance reversed, with about 25.24 million XRP moving off exchanges in late May.
The second part of that sequence can look constructive. Coins leaving exchanges often reduce the supply available for fast selling and can point to custody, accumulation, or positioning away from trading venues.
In a stronger market, such a move could help confirm a bounce.
A 22.80 million XRP inflow shows that meaningful supply had also moved toward exchanges before the reversal.
The outflow that followed carries weight, but it leaves the earlier sign of sell-side pressure in the picture. It also cannot prove by itself that buyers are willing to absorb spot supply at higher prices.
The price response shows why the distinction counts. If XRP moves off exchanges and the price still falls to a multi-month low, visible exchange balances are only one part of the pressure.
Spot demand, order-book depth, leverage, and trader confidence can all carry more weight in the immediate window.
CryptoSlate’s XRP data also shows why centralized exchange behavior can be impactful: XRP’s 24-hour CEX volume was around $1.62 billion, compared with DEX volume of about $1.4 million.
For this market, the main price signal is still being formed on centralized venues, so exchange flows and liquidity conditions are where the ETF and accumulation narratives meet live selling.
The sell-zone pattern has been building for months. An earlier analysis found that XRP losses were forcing late buyers out and turning rebounds into fresh selling areas.
The latest low suggests that behavior has not fully cleared. Outflows can reduce potential supply, but they cannot repair sentiment if traders keep using every bounce to exit.
The strongest explanation for the contradiction is market structure.
XRP can keep some bullish signals and still leave sellers in control when liquidity is thin enough, and spot conviction weak enough, for marginal selling to push through supportive flow headlines.
A recent look at XRP liquidity found that Binance’s 30-day XRP liquidity index was near 0.043, its lowest level since January 2020, while all-exchange open interest hovered near $2.9 billion and futures volume ran at about 6.8 times spot volume.
Under those conditions, price can move sharply even when the broader story contains bullish data points.
Thin liquidity changes how flow signals should be understood. In a deep market, ETF inflows and exchange outflows may help absorb selling pressure over time.
In a less liquid market, a smaller burst of spot selling can still move price, especially if derivatives activity is high and traders are leaning on the same levels.
Broader ETF rotation is less important here than it might look at first. XRP inflows have stood out at times while Bitcoin and Ethereum products faced pressure, and CryptoSlate has covered that ETF rotation.
Relative ETF strength is different from outright price strength. XRP can attract capital through one channel and still fall if the spot market is weaker, less liquid, or more leveraged than the inflow headline suggests.
For now, the next test is price, rather than another bullish data point. Buyers need to make the supportive flow signals visible in the chart.
A recovery through the low-$1.30s and a reclaim of the $1.34 area would show that buyers are finally absorbing visible sell pressure.
A loss of the $1.31 area while ETF inflows and exchange outflows remain constructive would strengthen the opposite case: XRP can have institutional wrapper demand and apparent accumulation without giving bulls control of the spot market.
So there is still a contradiction here. The flows say some capital is still moving toward XRP. The price says sellers are still winning.
Hyperliquid (HYPE) should be valued against the $600 trillion global asset market, not crypto’s $3 trillion universe. That is the case Bitwise Chief Investment Officer Matt Hougan made for the fast-growing perpetual futures platform.
Hougan said BHYP, Bitwise’s spot Hyperliquid ETF, has pulled in close to $60 million since its mid-May NYSE debut. He called it the strongest single-asset crypto ETP launch since Bitcoin.
Bitwise CIO Says Hyperliquid Is a Gen 2 Token
Hougan said HYPE differs from prior exchange tokens. The platform routes nearly all trading fees into buybacks.
“I think it’s going to take investors a while to realize that this is a Gen 2 token. Like it’s a new version. It’s not like the past,” he noted during a Friday interview with Nate Geraci.
HYPE traded near $68 on Saturday, up 10% in 24 hours. It ranked 11th by market cap, per BeInCrypto data.
Hougan framed Hyperliquid as a fintech application, not a crypto play.
“This is not a crypto app. This is a financial app that uses crypto in the back end to create a new financial experience that in many ways is better than the traditional system.”
Rising short positions across American stocks are starting to shape a different conversation around Bitcoin’s role in global markets.
According to CryptoQuant contributor XWIN Japan, a market increasingly built on hedging, concentrated AI trades, and heavy leverage could push more institutional capital toward BTC if liquidity conditions improve later in the year.
Wall Street Hedging and Bitcoin’s Changing Behavior
XWIN Japan argued in a market update published earlier today that the rise in US equity short interest does not necessarily point to outright bearish sentiment. Instead, hedge funds appear to be stacking defensive positions while keeping long exposure intact.
Per the crypto research institution, hedge fund gross leverage has climbed to around 293%, alongside record S&P 500 short exposure and elevated Days-to-Cover metrics.
Much of that pressure appears tied to heavy concentration in a handful of AI-related megacap stocks, while weaker sectors and smaller companies have been attracting shorter bets.
That backdrop matters for Bitcoin because it has historically traded closely with equities during market panics. For example, during the COVID-19 selloff in 2020, BTC fell alongside stocks rather than acting as a safe haven.
But according to XWIN, that relationship started to shift in 2025. While the S&P 500 has traded in a relatively tight range, BTC has shown larger swings tied to ETF demand, leverage activity, and crypto-native liquidity flows.
It concluded that going forward, Bitcoin may become a hybrid asset, still exposed to macro liquidity conditions, but more capable of moving on its own terms.
“If future conditions include Fed easing, weaker dollar conditions, and renewed ETF inflows,” XWIN wrote, “Bitcoin could become a secondary liquidity destination rather than simply a correlated tech-like asset.”
The OG crypto asset had fallen over the weekend to around $74,000 but rebounded above $77,000 as reports suggested developments toward a potential ceasefire agreement between the USA and Iran.
But as of the time of writing, data on CoinGecko showed it had dropped back below $77,000 by a few hundred dollars, leaving it down almost 30% over the past year.
On-Chain Activity Cools While Traders Watch Key Levels
Meanwhile, the current consolidation phase has seen Bitcoin’s network activity drop off sharply, with crypto analyst Ali Martinez revealing that active addresses fell nearly 40% in two weeks, from 821,000 to 494,000.
According to him, weaker activity during sideways price action often indicates short-term traders leaving the market, while longer-term holders retain supply.
He added that derivatives traders are increasingly positioned for a breakout, with funding rates recently touching 0.4%, their highest level in more than two months. On-chain data also showed large holders redistributing more than 18,000 BTC during the consolidation period.
Martinez identified resistance around $78,000 and support near $76,000, with a move above resistance, in his opinion, possibly opening the door toward $85,000, while losing support may send Bitcoin toward the mid-$60,000 range.
Bitcoin has lost the $80,000 level as selling pressure and market uncertainty combine to test the resilience of a recovery that had been building since the April lows. The breakdown is significant, and XWIN Research Japan has published a structural analysis that places the current weakness in a context that goes considerably deeper than a technical support level failing to hold.
The analysis begins with a premise that reframes how the entire 2026 Bitcoin market should be understood. This cycle is structurally different from the ones that preceded it. ETFs, corporate treasury allocations, interest rate dynamics, regulatory development, and dollar liquidity conditions now influence Bitcoin’s price behavior in ways that did not exist during the 2020 to 2021 advance. The asset has institutionalized — but the on-chain data tells a more complicated story about what is actually driving day-to-day price movements.
The Coinbase Premium Index is where the structural concern becomes most visible. The metric measures the price gap between Coinbase — the primary venue for US institutional spot buying — and offshore exchanges like Binance. During the 2020 to 2021 bull market, that premium stayed predominantly positive, reflecting sustained American institutional demand flowing into the spot market through the most regulated and most scrutinized venue available.
In 2026, that premium has repeatedly fallen into negative territory — a reading that XWIN Research Japan identifies as the gap between the narrative of institutional adoption and the reality of where actual spot demand currently stands.
Two Realities And The Question That Defines What Comes Next
The XWIN Research Japan analysis holds two contradictory truths simultaneously and refuses to resolve them prematurely.
The long-term picture remains structurally constructive. Exchange reserves have declined to approximately 2.68 million BTC — coins leaving exchanges and moving into long-term holding, ETF custody, and low-liquidity storage at a sustained pace. Less Bitcoin available on exchanges means less immediate sell-side supply, and the directional trend of that reduction supports the supply squeeze argument that underpins the long-term bullish case.
The short-term picture tells a different story. Open Interest has surged since April 2026 while funding rates remain unstable — the signature of a market where leverage-driven futures activity is dominating price discovery rather than genuine spot accumulation. Recent price movements, including the recovery from the April lows and the current breakdown below $80,000, reflect derivatives positioning more than the organic spot demand that characterized Bitcoin’s most durable advances.
The Exchange Stablecoin Ratio adds the missing piece. The decline in stablecoin waiting capital — the dry powder sitting on exchanges ready to deploy into spot purchases — confirms that the aggressive USDT and USDC inflows that fueled the 2021 advance have not returned at a comparable scale.
The question XWIN Research Japan identifies as the defining one for this cycle follows directly from those three signals. Bitcoin has built the institutional infrastructure — ETFs, corporate treasuries, regulatory frameworks — that the previous cycle lacked entirely. What has not yet been built is the sustained spot demand that converts institutional infrastructure into a durable bull market. Whether that demand arrives, and when, is what the next phase of price action will begin to answer.
Bitcoin Tests Critical Support As Recovery Momentum Continues To Fade
Bitcoin is trading near $76,900 after extending its rejection from the $81,000-$82,000 resistance zone, a region that continues to cap every recovery attempt since April. The daily chart shows BTC now slipping back below the 100-day moving average while remaining firmly trapped beneath the descending 200-day moving average, reinforcing the broader bearish structure still dominating the market.
The recovery from the February capitulation low near $63,000 initially showed constructive momentum, with Bitcoin reclaiming the $74,000 support region and printing a sequence of higher highs through April and early May. However, bullish momentum weakened significantly once the price approached long-term resistance, where repeated failed breakouts created a lower-high formation near local tops.
Importantly, Bitcoin is now approaching the highlighted demand zone between $72,000 and $74,000, an area that previously acted as the foundation for the broader rebound. Holding this region could allow BTC to stabilize and attempt another recovery phase. However, a decisive breakdown below support would likely expose the market to a deeper retracement toward the broader accumulation range near $64,000-$65,000.
Volume during the latest decline remains elevated relative to recent consolidation phases, suggesting active selling pressure continues driving price action. Combined with weakening Coinbase Premium readings and unstable futures positioning, the chart reflects a market still struggling to transition into a sustainable spot-driven bullish trend.
Featured image from ChatGPT, chart from TradingView.com
