Stock market on an all-time high streak, but Bitcoin is left out?...Expert: "Isolated as liquidity dries up"

▲ Bitcoin (BTC)

While the stock market continues its all-time high streak, the cryptocurrency market has entered an extreme decoupling phase, showing an isolated trend amid liquidity pressure.

Dan Gambardello, host of the crypto-focused YouTube channel Crypto Capital Venture, diagnosed in a video released on May 3 (local time) that the divergence between Bitcoin (BTC) and the stock market is becoming clear. He analyzed that while the S&P and NASDAQ recorded their strongest monthly gains since 2020, reaching new all-time highs, the cryptocurrency market is showing the exact opposite trend with rapidly shrinking investor sentiment. Gambardello explained that the stock market continues to rise even in a high-interest rate environment, driven by AI performance, while cryptocurrencies, which are highly dependent on liquidity, are directly reflecting macroeconomic pressures.

Indeed, Microsoft's AI business grew by 123% annually, expanding to $37 billion, and Amazon's AWS also showed its fastest growth in the last 15 quarters. Major big tech companies are increasing their AI investments, raising their 2026 capital expenditure guidance from $650 billion to $700 billion. Gambardello assessed that this performance-driven rally is sustaining the stock market's rise, but liquidity has not yet flowed into the cryptocurrency market.

The Federal Reserve's hawkish stance is also acting as a burden. The market has virtually ruled out the possibility of interest rate cuts in 2026, and there is about a one-third chance that the next policy move will be a rate hike. With the possibility of further hikes in 2027 being discussed, the 30-year Treasury yield has surpassed 5%, and oil price volatility continues. In this environment, Bitcoin remains approximately 38% below its all-time high of $126,100.

However, Gambardello also suggested that the current extreme pessimism could actually be a turning signal. He analyzed that there is a possibility of a bull market starting if the liquidity environment changes rapidly when market sentiment hits rock bottom, similar to the end of quantitative tightening in 2019. He also cited a potential drop in oil prices coinciding with Iran's peace proposal as a variable that could lead to a slowdown in inflation and provide an impetus for a change in Fed policy.

The possibility of a policy shift and renewed expectations for interest rate cuts were also mentioned if Kevin Warsh, a strong candidate to succeed Fed Chair Jerome Powell, emerges. Furthermore, if Nvidia's earnings, scheduled for May 20, change the tech-stock-driven rally, a cyclical flow of liquidity from the stock market to the cryptocurrency market could occur. The cryptocurrency market is currently assessed to be in a preparatory phase for entering a liquidity recovery period amidst changes in the macroeconomic environment.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*