Traders are treating Bitcoin as a high-beta version of the same risk appetite that drives Nvidia and Mag7, and it should move with stocks on Green Day.
Instead, Bitcoin lost its $80,000 support and hit an intraday low of $78,759.70 on May 13, while the S&P 500 hit a new all-time high, with QQQ up 1.06% and Nvidia up 2.84%.
This stock price increase is based on earnings revisions, AI earnings, and share buybacks, all of which buy up cash-flowing assets and divert liquid assets.
A gathering attended only by megacaps
The May 13 stock session was driven by megacap strength. Seven of the S&P 500’s 11 sectors closed lower, the Dow Jones Industrial Average fell, and decliners outnumbered advancers on both the New York Stock Exchange and Nasdaq, even though the index itself rose.
| signal | Read on May 13th | why is it important |
|---|---|---|
| S&P500 | New ATH/Green | Headline risk-on signals |
| QQQ | +1.06% | technical ability |
| Nvidia | +2.84% | AI/chip leadership |
| S&P sector | 7 out of 11 are down | width is weak |
| NYSE/NASDAQ width | Declining faction > Progressive faction | rally is not wide |
| Bitcoin | I lost $80,000. Low around $78,760 | remaining liquid assets |
The S&P 500 was in the green as its top 10 stocks, which account for 36.5% of the index by market capitalization and were led by Nvidia, Apple, and Microsoft, rose.
Goldman Sachs estimates that AI investments alone will drive about 40% of the S&P 500’s EPS growth this year, with the largest cloud infrastructure companies planning to spend about $670 billion in 2026.
Megacap technology provides EPS beats, AI revenue lines, share repurchase programs, forward guidance, and margin expansion against any macro headwinds, all of which strengthen bids when rates rise.
Bitcoin’s bidding mechanism is liquidity-only, so when liquidity gets tight and stock price increases are concentrated in cash-flow mega-cap stocks, Bitcoin absorbs the downside. Meanwhile, the earnings upside is concentrated mostly in cash-generating mega-cap stocks.
April’s PPI report further exacerbated the problem, with producer prices rising 1.4% month-on-month and 6% year-on-year, the largest 12-month increase since December 2022. Energy led the way, with gasoline prices rising 15.6% month-on-month.
The news significantly raised expectations for a Fed rate hike, with traders pegging the probability of a rate hike by December at 34.3%, up from about 15% a week ago.
Both U.S. bond yields and the dollar rose following the announcement. For non-earning assets whose income is not offset, the combination acts as a direct tax on the valuation.
Correlation without upside beta
K33 found that the 30-day correlation between Bitcoin and Nasdaq remains above 0.7, confirming that Bitcoin is still trading within the equity macro cycle.
While Nasdaq futures rose 27% from March 30 to May 8, the largest 30-day gain in 16 years, K33 identified a pattern in which BTC’s upside beta often fades when the Nasdaq rises more than 10% in 30 trading days.
Bitcoin’s rising beta was fueled through widespread liquidity expansion, and this rally concentrated the gains in AI-related revenue while BTC’s spot conditions worsened.
The Spot Bitcoin ETF pulled in $629.8 million on May 1, $532.3 million on May 4, and $467.3 million on May 5, according to data from Farside Investors. The trend then reversed, with outflows of $268.5 million on May 7, $145.7 million on May 8, and $233.2 million on May 12.
BTC’s perpetual funding rate has been negative for 74 consecutive days this week, average daily BTC spot volume has reached approximately $2.7 billion, and BTC closed below its 200-day moving average on all approaches.
In a market with negative funding, low spot trading volumes, and 200-day moving average overhead, a broader liquidity catalyst is needed for further upside.
As of May 6, the Federal Reserve’s balance sheet had total assets of approximately $6.71 trillion, reserves of more than $3 trillion, and the Treasury Department’s general account of $878 billion.
The TGA absorbs reserves from the banking system and drains liquidity from increasingly risky assets. The Treasury Board’s Borrowing Advisory Committee projected that the TGA would end the third and fourth quarters of fiscal 2026 at $900 billion and $950 billion, respectively.
The committee noted that oil prices have risen nearly 80% since the beginning of 2026, a source of supply-side inflation that continues to tie the Fed’s hands regardless of stock performance.
Bitcoin’s valuation lies between Fed liquidity and real interest rates. AI Bridging Megacap technology to separate revenue sustainability, capital return programs, and revenue visibility.
Result of split
As the inflation shock subsides, the likelihood of a Fed rate hike diminishes and the dollar weakens.
In such an environment, ETF inflows could resume on a large scale after a temporary reversal, and short covering could compress funding rates from negative to neutral, with the $80,000 to $85,000 range becoming a floor rather than a ceiling.
Citi’s BTC bullish scenario targets $165,000 over 12 months, conditional on easing liquidity, sustained ETF demand, and progress in crypto-specific legislation.
High beta trading is again at work in this scenario, driven by easing liquidity and demand for ETFs rather than index-level price movements.
| scenario | macro trigger | BTC trigger | Probably the influence of BTC |
|---|---|---|---|
| bull case | Inflation shocks will fade. The probability that the Fed will raise interest rates will decline. dollar weakens | ETF inflows resume. Funding moves towards neutrality. BTC collects $80,000-85,000 | Support will be between $80,000 and $85,000. Citi bull case damages $165,000 over 12 months |
| basic case | Inflation continues persistently but does not get worse | Mixed ETF flows. BTC chop is about $80,000 | Range market price. BTC lags behind megacap technology |
| bear case | PPI feeds into CPI/PCE. Probability of interest rate hike approaches 50% | ETF outflows continue. BTC fails to recover $80,000 | Testing the $74,000 to $68,000 zone |
| reverse macro | Liquidity will become even tighter. Oil shock continues | Deleveraging and stop losses accelerate | Citi’s reverse scenario suggests $58,000 |
If April’s PPI is not relieved and is reflected in May’s CPI and June’s PCE readings, increasing the probability of a price increase towards 50%, the situation for Bitcoin will deteriorate no matter what happens with megacap technology.
Three consecutive days of ETF outflows through May 12 indicate that institutional investors are already reducing exposure at this level.
Failure to recover $80,000 in the next few days will begin the test of the $74,000-$68,000 zone, where derivatives liquidations and retail stop losses are concentrated.
In Citi’s unfavorable macro scenario, Bitcoin is set at $58,000. Along that path, Bitcoin will absorb the macro downside on its own, while megacap technologies continue to bid for sustainability in AI revenue.
(Tag translation) Bitcoin
