BTC falls to $102K as risk-on sentiment favors equities over scarce assets like gold and Bitcoin
Bitcoin (BTC) briefly surged to a three-month high of $105,720 on May 12, but then sold off to $102,443, surprising traders who expected the U.S.–China tariff truce to act as a bullish catalyst. While the stock market rallied, Bitcoin lagged — and analysts say the reason lies in broader macroeconomic dynamics and investor rotation.
Key Takeaways:
BTC dropped 3.1% after peaking at $105.7K, despite the U.S.–China tariff truce
Investors shifted focus to stocks, viewing them as direct beneficiaries of lower tariffs
Gold and Bitcoin underperformed as demand for scarce, defensive assets fell
BTC correlation with S&P 500 remains high at 83%, limiting divergence potential
Despite dip, ETF inflows remain strong, with $2B entering U.S. spot Bitcoin ETFs from May 1–9
Stocks Rally, Bitcoin Stalls: Why the Divergence?
The 90-day tariff reduction agreement between the U.S. and China — which slashes import tariffs to 10% — sparked a broad stock market rally, especially in sectors sensitive to trade.
U.S. Treasury Secretary Scott Bessent said the deal may be extended if “constructive dialogue” continues.
While this was seen as bullish for equities, Bitcoin investors hesitated, interpreting the agreement as less impactful for decentralized, non-yielding assets.
Bitcoin Faces “Macro Headwinds” Despite Strong Fundamentals
Bitcoin had already gained 24% over the past 30 days, while the S&P 500 rose 7% and gold remained flat. Given the tight correlation with traditional markets, traders saw limited upside without a new catalyst.
Additionally:
Gold dropped 3.4% on May 12 as DXY hit a 30-day high, indicating investor confidence in traditional markets
Bitcoin surpassed silver and Google in market cap, becoming the 6th-largest tradable asset globally
Large Holdings Raise Concentration Concerns
Recent headlines about Strategy’s $1.34B Bitcoin purchase (13,390 BTC added between May 5–11) have raised concerns about market concentration. Combined with BlackRock, Strategy now controls over 1.19 million BTC — around 6% of circulating supply.
Critics like Peter Schiff argue this strategy could backfire if prices decline and borrowing costs mount. However, Strategy has already raised $42B in equity and debt, suggesting no urgent need to sell.
Why $100K Support Is Likely to Hold
Despite the pullback, the underlying market structure remains bullish:
U.S. Bitcoin ETFs saw $2 billion in inflows in just the first 9 days of May
Price consolidation appears institutional-driven, not driven by retail euphoria
Analysts note the decline was a technical correction ahead of the May 13 CPI report
