U.S. equity ETFs tracking Dow Jones, the S&P 500, and Nasdaq-100 plummeted in overnight trade.

  • Aurelie Barthere, Principal Research Analyst at Nansen, told Stocktwits that investors are selling stocks more aggressively than crypto.
  • Bitfinex noted that the crypto market is entering a new phase that is driven more by spot demand than leveraged trades, with the Leverage Reset Index at a multi-year low of 0.32.
  • The firm also pointed out that smaller wallets have been net sellers of Bitcoin for more than 30 days, while large “whale” wallets have increased their holdings by roughly 8%.

Bitcoin held above $70,000 on Wednesday night, while U.S. stocks slipped and oil prices climbed back toward $100 a barrel amid escalating tensions between the U.S. and Iran. Analysts point to a massive "leverage reset" and institutional whale accumulation as the primary factors driving the digital asset's decoupling from the sliding S&P 500.

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Oil prices surged over 8% to cross $100 even after the IEA announced the largest emergency release of crude reserves in history as flows through the Strait of Hormuz remain disrupted. 

The United States Oil Fund (USO) was among the top trending tickers on Stocktwits at the time of writing. USO’s price gained over 8% in overnight trade, with retail sentiment in ‘extremely bullish’ territory amid ‘extremely high’ levels of chatter.

Bitcoin Holds Above $70K While Stocks Slide

The SPDR S&P 500 ETF (SPY) fell as much as 1.11% in overnight trade, the SPDR Dow Jones Industrial Average ETF (DIA) dropped 1.75%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 1.03% lower. SPY was also among the top trending tickers on Stocktwits in after-hours, with retail sentiment continuing to trend in ‘bearish’ territory over the past day. 

Meanwhile, the cryptocurrency market held strong, rising 1.2% in the last 24 hours to around $2.47 trillion. Bitcoin’s price edged 0.6% higher, holding at $70,500. Retail sentiment around the apex cryptocurrency on Stocktwits remained in the ‘neutral’ zone.

“This relative resilience suggests that, even as geopolitical uncertainty lingers, the marginal seller in bitcoin may be less aggressive than in equities at the moment,” Aurelie Barthere, the Principal Research Analyst, told Stocktwits over email.

Leveraged Speculation Is Slowing Down

According to Bitfinex, the crypto market is entering a new phase that is driven more by spot demand than leveraged trades. It noted that the Leverage Reset Index has fallen to a multi-year low of 0.32, which is normally a signal of price discovery being driven by spot buyers rather than leveraged speculation. 

“What we’re seeing now is the aftermath of a major deleveraging event,” the firm told Stocktwits. “Most of the speculative excess in the derivatives market has been flushed out, leaving a market that is increasingly driven by spot demand rather than leverage.” 

Bitfinex analysts also pointed to on-chain data showing micro wallets have been net sellers of Bitcoin for more than 30 days, while whale wallets – those holding more than 1,000 BTC – have increased their accumulation by 8% since BTC’s October peak of over $126,000. It said this suggests large investors may be absorbing the selling pressure.

Read also: Arthur Hayes Wouldn’t Invest $1 In Bitcoin Right Now – Warns BTC Price Could Slip Below $60K Again If US-Iran War Escalates

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