The cryptocurrency market remains firmly in risk-off territory, with Bitcoin slipping below $70,000 for the first time in eight weeks. However, a select few altcoins have defied this downturn, notching double-digit gains.
Altcoin Surge Amidst Bitcoin Slump
NEAR Protocol has surged 15% over the past 24 hours, according to CoinGecko data. Worldcoin (WLD) and Internet Computer (ICP) have also seen significant gains, hovering near 12% and 11% respectively.
Hyperliquid is trading near $73, a slight 0.7% dip on the day and approximately 3% below its record high of $75.46 set on Tuesday. Despite this minor pullback, the token has experienced an impressive 125% increase over the past year, highlighting its strong momentum.
Factors Driving Divergence
This robust performance from select altcoins occurs even as Bitcoin has fallen below the crucial $70,000 psychological level, reaching a local low of $69,034. Bitcoin is down more than 4% in the last 24 hours, leading to the liquidation of $728 million in leveraged positions, according to CoinGlass data.
“Geopolitics lit the fuse for a sharp risk-off move, triggering the ~$650M+ liquidation cascade on June 1,” Andri Fauzan Adziima, research lead at Bitrue Research Institute, told Decrypt. “ETF outflows amplified it, with spot Bitcoin products bleeding billions in recent weeks as institutions rotated or de-risked.”
Experts suggest that Bitcoin is facing pressure from multiple headwinds, including geopolitical tensions, macroeconomic factors, and significant capital outflows from exchange-traded funds.
Tim Sun, senior researcher at HashKey Group, attributes Bitcoin’s decline to rising U.S. Treasury yields, which have dampened market risk appetite, and the booming AI market, which is siphoning capital away from cryptocurrencies. “This has left the crypto market relatively weak due to a lack of new narratives and strong capital inflows,” Sun told Decrypt. The sale of 32 Bitcoin by Strategy has further amplified this bearish sentiment.
Ecosystem-Specific Catalysts
In contrast, altcoin gains “seem to be independently driven by their respective ecosystems,” according to Sun.
NEAR Protocol’s recent gains are linked to developments in privacy and AI, Decrypt reported. Injective is also benefiting from a similar AI trend, Adziima noted. Worldcoin’s price appreciation, meanwhile, can be attributed to “whale buying, derivatives interest, and adoption wins like live music ticketing via World ID,” he added.
Nearly 97% to 99% of Hyperliquid’s revenue is being reinvested into token buybacks through its Assistance Fund, which has positively impacted the ecosystem and token holders. While the token’s price has reached multiple record highs over the past week, its market capitalization only hit a new all-time high on Tuesday, underscoring the deflationary effect of these buybacks. Furthermore, the HYPE token has seen growing institutional popularity over the past month, reflected in sustained inflows into HYPE ETFs.
Concentrated Capital Flows
Beyond individual fundamental developments, there is a “shared commonality,” according to Sun. He explained that “capital within the crypto industry is increasingly concentrating on assets with clear narratives, real cash flow growth, and healthy supply structures.”
“These aren’t random pumps, they’re conviction plays with real catalysts in a sea of beta,” Adziima stated. “Capital is rotating hard into narratives with actual utility, yield, or tech edge, exactly what I’d expect in this phase.”
With capital exiting ETF products and worsening macroeconomic conditions driven by factors such as the U.S.-Iran conflict and rising energy costs, the risk appetite for the crypto market remains virtually non-existent.
“Even if a rebound occurs, we believe a relatively weak, range-bound consolidation is the most probable scenario,” Sun concluded. He added that a bear case scenario for crypto markets would involve a potential correction in U.S. equities, which remain elevated, noting that “These factors will all impact crypto assets, making it even harder for the crypto market to fully enter a phase of expanding risk appetite.”
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