BlockBeats report, on May 26, XWIN Research stated that short positions in the U.S. stock market have recently surged to historical highs, but this does not indicate a broad market bearish sentiment. Data shows that the total leverage ratio of hedge funds has risen to approximately 293%, with short exposure and the days-to-cover metric for the S&P 500 both reaching record levels, reflecting that institutional investors are significantly increasing their hedging positions while maintaining large long positions. The current market exhibits a structural state of “high leverage with simultaneous expansion of long and short positions”—while the upward trend remains apparent on the surface, defensive sentiment within the market is clearly intensifying.
The core driver behind this phenomenon is the continued heavy concentration of capital in AI-related mega-cap stocks. Massive inflows of capital are flowing into a few major tech giants, while small- and mid-cap stocks and weaker sectors face sustained short-selling pressure, resulting in an overall resilient index performance but growing internal market fragility. This structure implies that once enthusiasm for AI-related trading cools, the market could experience sharper volatility and a more pronounced release of risk.
This shift is also significant for Bitcoin. Historically, BTC has tended to move in tandem with U.S. equities during major risk events—for example, during the 2020 pandemic crash, Bitcoin declined alongside the S&P 500, failing to demonstrate traditional safe-haven characteristics. However, since 2025, the two have begun to diverge significantly: the S&P 500 has remained relatively stable, while BTC’s volatility has expanded markedly. ETF inflows and active spot buying indicate that Bitcoin is increasingly driven by its own liquidity cycles, leverage structures, and institutional demand. The market is beginning to view Bitcoin as evolving from a purely “high-risk asset” into a hybrid asset that combines macro liquidity characteristics with an independent market structure.