Bitcoin (CRYPTO: BTC) continues to underperform tech stocks, even as ever more bottoming signs lift market sentiment.

Bitcoin Misses Risk Rally

In an X post on Aug. 7, Glassnode data highlighted that global risk assets including U.S. equity indices, European stocks, gold, have moved sharply while Bitcoin has largely stood still.

Bitcoin remained slightly below where it traded a week earlier and lagged the S&P 500 by more than four percentage points.

The divergence stands out because Bitcoin has historically been viewed as a high-beta risk asset. This time, improving sentiment across traditional markets has failed to produce a comparable crypto rally.

Bitcoin’s lack of volatility was particularly notable following a major self-custody security incident.

In roughly 25 minutes during the early hours of July 31, an attacker exploiting a five-year-old key-generation flaw in Coldcard hardware wallets reportedly drained approximately 594 BTC, worth about $38 million, from roughly 500 wallets.

The incident triggered substantial on-chain activity like holders largely migrating assets into fresh storage rather than liquidating their Bitcoin.

More strikingly, spot prices showed little measurable reaction to the forced movement of older supply.

Institutional Bitcoin demand has weakened sharply, with spot ETFs posting record June outflows and corporate buying failing to offset the selling.

Despite supportive macro conditions and resilient prices, the lack of aggressive buyers has kept Bitcoin stagnant, leaving a rebound in institutional flows as a key catalyst for a potential bottom.

Bottom Signals Lack Panic

Bitcoin’s current market structure is also challenging the traditional template for a cycle bottom.

Historically, major bottoms have been accompanied by capitulation: volatility surges, prices collapse and the percentage of profitable Bitcoin supply falls sharply.

This cycle has reached similar profitability compression without the accompanying volatility explosion.

Instead, the adjustment has occurred through months of sideways and declining prices.

That suggests Bitcoin may be approaching familiar bottom territory through time-based capitulation and investor boredom rather than a dramatic final flush.

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