Binance Research Links Bitcoin Drop to US Stock Inflows, Eyes 20-Week Bottom

After climbing above $82,000 in the first week of May, Bitcoin has once again slid into a downward trend. Now trading below $70,000, the question on everyone's charts is whether the February local low of $60,000 gets a sequel.

As traders scratch their heads over the drawdown, a comprehensive analysis has landed from Binance Research.

According to the firm's analysts, the decline in Bitcoin and the broader crypto market is being driven by capital flowing into US equities. Their bottom call: somewhere within the next 20 weeks.

Binance Research says the recent weakness in crypto, Bitcoin included, is not a crypto-specific implosion but rather a side effect of global liquidity migrating to US exchanges. Translation: capital is piling into US stocks, and crypto is left waiting for a table.

Analysts point to the Cboe S&P 500 Distribution Index as the key indicator. According to Binance, the index climbed to 42, the third highest reading on record, suggesting that flows within the S&P 500 are crowding into a narrow set of themes.

Binance Research flagged AI, semiconductors, defense, energy, and commodities as the sectors pulling in capital. Bitcoin, for now, is not on that guest list.

The team noted that unless crypto serves up a crisis of its own, equity inflows of this kind are generally temporary, and could in fact be a signal that a bottom is forming.

Citing historical data, analysts emphasized that Bitcoin tends to form a market bottom quickly following periods of such extreme macroeconomic concentration. According to Binance, in the past, after periods when US stock concentration reached extreme levels, Bitcoin typically found its floor within 20 weeks.

*This is not investment advice.