From May 20 to 25, 2026, the global macro environment was overall friendly to risk assets: the S&P 500 index reached a historical high during this period, oil prices fell, and the yield on the US 10-year Treasury bonds declined, maintaining a high risk appetite in traditional markets. However, during the same time frame, the cryptocurrency market exhibited a clear divergence—BTC was priced at about $76,600, and ETH at around $2,140, with a decline of approximately 1.5% and 1.7% in the last week, respectively, significantly weaker than the performance of US stocks. In terms of capital flow, the BTC spot ETF, which had continuously absorbed buy orders in March and April, saw a cumulative net outflow of over $2 billion in the two weeks leading up to May 25, with approximately $1.26 billion flowing out in the most recent week. A report by Wintermute pointed out that the institutional buying that previously drove BTC from $70,000 to nearly $80,000 had clearly diminished. At the same time, the ETH/BTC exchange rate dropped to about a 10-month low, and ZEC/BTC rapidly retraced after reaching a historic high of 0.00895 on May 23, with whales taking large leveraged positions in this trading pair, amplifying the market perception of “mainstream funds withdrawing and a few large holders speculating on small-cap coins.” In the context of US stocks hitting new highs and a generally positive macro environment, the cryptocurrency assets showed a pattern of net redemption from ETFs alongside weak price movements, shifting the core issue from a simple price correction to understanding the joint effects of institutional fund withdrawal and whale speculation leading to a phase re-pricing of overall risk appetite in the cryptocurrency market.

Disjunction Between New Highs in US Stocks and Price Corrections

From May 20 to 25, US stocks and cryptocurrency assets exhibited a typical “direction dislocation.” On one hand, the S&P 500 index reached a historical high during this period, oil prices fell, and the yield on the US 10-year Treasury bonds declined, creating a macro environment that was highly friendly to risk assets like stocks, indicating that overall global risk appetite had not contracted but was instead in a more optimistic state. Logically, this configuration of “strong stocks, falling rates, and cooling oil prices” would usually synchronize to boost sentiment and valuations for high-volatility assets.

However, during the same time window, the performance of the cryptocurrency market was noticeably weak: BTC was priced at about $76,600, with a weekly drop of approximately 1.5%; ETH was around $2,140, down about 1.7% over the week, not only failing to follow the S&P 500 to reach new highs but also recording a moderate pullback, thereby underperforming traditional risk assets. This suggests that the current pressure does not stem from systematic risk aversion at the macro level but rather from a contraction in risk appetite within the cryptocurrency system—funds have begun to withdraw from high-beta assets first, and the influx of new buying has been insufficient to absorb selling pressure from existing holders, causing prices to decrease even in a macro environment characterized by “no bad news.” Historically, the combination of “macro-friendly + crypto weakness” often points to two problems: first, that the actual usable leverage and liquidity in the market are being passively reduced, and second, that there is insufficient willingness to allocate new capital from outside sources. This also lays the groundwork for key observations on whether BTC and ETH can once again attract cross-market funds and escape the dislocation with US stocks.

$2 Billion Turnaround: BTC Spot ETF Redemption Wave

In the two weeks leading up to May 25, the BTC spot ETF saw a cumulative net outflow of over $2 billion, with about $1.26 billion flowing out in the most recent week (according to Wintermute), representing a complete directional reversal from the continuous net inflow during March-April. Combined with the current friendly macro backdrop of the S&P 500 at historical highs, declining rates, and falling oil prices, this “turnaround of capital” resembles structural deleveraging rather than passive selling. Wintermute pointed out that the prior institutional buying that elevated BTC from around $70,000 to nearly $80,000 has clearly receded, and the ETF itself is a primary entry point for such compliant funds, indicating that the core funds that previously drove the market up are now systematically exiting through redemptions.

When the ETF switched from “continuous capital absorption” to “redemption wave,” the marginal forces in the spot market shifted from new buy orders to existing sell orders: new funds ceased to passively buy BTC and instead tested the order book's absorption capability due to the selling pressure from redemptions, leading to a noticeable decrease in price elasticity against any additional bearish news. For the entire cryptocurrency market, BTC's role as a pricing anchor is also quietly changing—when the anchor itself is in a state of institutional deleveraging and being subjected to net outflows from ETFs, the risk premium of downstream assets passively rises, and leverage and market making tend to contract, while cross-market funds reassess the threshold for viewing BTC as a core asset allocation and risk benchmark in the context of the new highs in US stocks and the redemption wave in BTC.

ETH/BTC Hits Ten-Month Low: Funds Flow Back to Bitcoin

During the week leading up to May 25, BTC fell to about $76,600, with a weekly drop of about 1.5%, while ETH was around $2,140, with a weekly decline of about 1.7%, a slightly larger drop than BTC (according to Wintermute). At first glance, the absolute difference in declines between the two is not large, but Wintermute pointed out that the ETH/BTC exchange rate has dropped to a ten-month low, indicating that under the same macro and liquidity environment, both incremental and existing funds are relatively prioritizing BTC exposure over continuing to bear the volatility of higher-beta assets like ETH.

Historically, ETH’s strength relative to BTC often corresponds with a rise in market risk appetite, where funds shift from “blue chips” to more flexible assets, eventually rotating into higher-risk mainstream altcoins; conversely, when ETH/BTC weakens and even creates relative new lows during a phase where BTC itself is under pressure (net ETF redemptions and corrections amidst new highs in US stocks), it indicates that the internal style of cryptocurrency is retracting from high-beta to the “higher quality” BTC. For mainstream altcoins, this structural return creates dual pressure: on one hand, the weakness in BTC and ETH themselves reduces hedging and reallocation space; on the other hand, the weakening of ETH as a relative benchmark for most on-chain risk assets makes funds even less willing to leverage or increase positions in more peripheral assets, resulting in a passive compression of overall risk budgets. In contrast to the overall friendly macro environment, the signal released by the ten-month low in ETH/BTC indicates that the cryptocurrency space has prioritized a defensive allocation of “holding onto BTC and reducing the periphery,” rather than following the new highs in US stocks to initiate a new round of broad risk expansion.

ZEC/BTC Whale Speculation: The Bloody Leverage of Small-Cap Coins

In the same timeframe where ETH/BTC was being passively deleveraged, ZEC/BTC exhibited a completely opposite “high-beta frenzy.” On May 20, ZEC/BTC reached a historical new high on markets like Hyperliquid, igniting short-term bullish sentiment; the subsequent correction did not break the expectation of a bullish outlook, and on May 23, the exchange rate hit a new high again, reaching as high as 0.00895 during trading. However, near this peak, buying momentum quickly waned, and ZEC/BTC subsequently experienced a noticeable correction, signaling the end of the short-term surge, with price movements exhibiting typical characteristics of “small-cap coins experiencing sharp rises driven by high leverage, quickly followed by rapid corrections.”

More indicative is the capital structure behind this round of market activity. Data from Hyperliquid showed that two whales built opposing high-leverage positions in the ZEC/BTC trading pair, with one side of the shorts ultimately profiting about $920,000, while the opposing side of the longs net lost about $2.55 million. For the relatively small-cap ZEC, this means that on a limited depth order book, the entry and exit of a few large accounts can dominate price trajectories, with sharp volatility being both a result and a tool: on one side, there are short whale capitalizing on fragile liquidity and betting on a correction, while on the other, long positions taking leverage to chase prices faced concentrated liquidation risk. Ordinary traders are then forced to bear amplified slippage and liquidation risks amidst the extreme volatility created by whale speculation, starkly contrasting with the current defensive allocation of “holding onto BTC and reducing the periphery” and highlighting that tail-end assets are increasingly evolving into high-risk leveraged gambling grounds for a few funds.

From Institutional Retreat to Whale Speculation, Next Step is Who Picks Up the Pieces

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