Bitcoin remains under pressure while global major stock indices touch record levels. The Nasdaq Composite is up more than 14% this year and the S&P 500 over 9%, while Bitcoin is down more than 30% YTD. 

Bitcoin dropped below $63,000 as global markets experienced a broad risk-off shift amid the rising military tension between Iran and Israel. The leading cryptocurrency touched $62,900 in Asian trading hours following a short rally to $63,776 on Sunday.

AI Boom and Mega IPOs Are Competing for Capital

The biggest challenge that Bitcoin faces is the increased competition for investor funds. AI stocks have taken over as a key market theme this year, as retail and institutional investors flock to the sector.

The high performance of companies like NVIDIA has fueled optimism about AI, and expected public offerings of companies like Anthropic and SpaceX have added to the speculation. Investors are reallocating capital to take advantage of these opportunities, and, as a result, cryptocurrencies are getting less risk capital.

CNBC data shows the relative performance of Bitcoin against the Nasdaq-100 has dropped by about 70 percentage points in a year, its worst since 2019.

Bitcoin ETFs Continue to See Heavy Outflows

Spot Bitcoin ETFs have recently experienced 13 days of net outflows of around $4.4 billion, according to SoSoValue.

BlackRock's iShares Bitcoin Trust (IBIT) had the biggest withdrawals, representing almost $3.3 billion. Fidelity's FBTC and Grayscale's GBTC saw significant redemptions as well.

In the same time frame, Bitcoin’s price dropped by around 23%, from roughly $80,790 to near $62,230. 

Strategy's Bitcoin Sale Raises Sentiment Concerns

Recent moves by Strategy (formerly MicroStrategy) also affected investor sentiment. The company revealed that it sold 32 Bitcoins worth around $2.5 million to assist in funding preferred stock obligations.

The sale is quite small compared to Strategy's total portfolio, but the move has garnered attention from all as Strategy has long been considered the largest corporate holder of Bitcoin. As investors begin to think about the potential for more sales if costs increase, they become more concerned.

Also Read: Bitcoin RSI Hits Its Lowest Level Since 2020 as BTC Rebounds Above $62,000

Bearish Positioning Continues to Increase

Weak trading volume in options indicates that traders are preparing for more volatility ahead. Call options have outperformed put options in various crypto-related assets, including the Strategy shares and BlackRock's Bitcoin ETF.

These factors, along with the continued withdrawal from Treasury funds, a maturing competition from AI investments, and declining market sentiment, are all working against BTC today. 

FAQs:

1. Why is Bitcoin underperforming compared to stock markets?
While major indices such as the Nasdaq and S&P 500 have rallied strongly in 2026, investor capital has increasingly flowed into AI-related stocks and high-growth technology themes. This shift has reduced demand for speculative assets like Bitcoin.

2. How are Bitcoin ETF outflows affecting the market?
Spot Bitcoin ETFs have recorded approximately $4.4 billion in outflows over a 13-day period. Persistent withdrawals create additional selling pressure as funds may need to liquidate holdings to meet redemptions.

3. Why did Strategy's Bitcoin sale attract attention?
Strategy sold 32 BTC worth about $2.5 million to support preferred stock obligations. Although the sale is small relative to its holdings, investors view it as a potential signal that further sales could occur if financial pressures increase.

4. What technical levels should Bitcoin traders watch?
The key support zone lies between $62,000 and $61,200, with major psychological support at $60,000. On the upside, Bitcoin needs to reclaim $64,000 and then $65,500 to improve its short-term outlook.

5. Could Bitcoin's bearish trend continue?
Several factors continue to weigh on sentiment, including ETF outflows, rising Treasury yields, geopolitical uncertainty, and competition from AI investments. Unless a strong catalyst emerges, volatility and downside pressure could persist in the near term.