Bitcoin is failing to keep pace with U.S. stocks hitting record highs and is posting consecutive declines.

According to blockchain outlet The Crypto Basic on May 31 (local time), the S&P 500 and the Nasdaq closed at all-time highs on the back of strength in tech stocks. Bitcoin, by contrast, fell below $75,000 earlier in the week and then slid as far as the $70,000 level, missing out on the broader rise in risk assets.

Since the start of this year, bitcoin has generally shown a high correlation with U.S. stocks. In March, its 30-day correlation with the S&P 500 rose to around 0.74. From late May, the two assets diverged. U.S. stocks pushed to higher peaks while bitcoin retreated, shifting market attention to constraints within the crypto market.

The first factor cited is a slowdown in spot demand. As the pace of inflows into exchange-traded funds (ETFs) has eased from earlier levels, buying is not absorbing supply sufficiently. Inflation has also risen again to around 3.8 percent, led by energy and producer costs, and the U.S. 10-year Treasury yield is holding at a high level near 4.5 percent. This environment was presented as one that encourages a wait-and-see stance rather than aggressive risk-taking.

Another burden is the lack of a clear catalyst to lift bitcoin. Stocks have artificial intelligence (AI) and gold has geopolitical demand, but bitcoin has been unable to build a clear narrative. That suggests a lack of a standalone catalyst strong enough to draw in investors' funds.

On-chain indicators also align with this trend. Glassnode's realised price data by holding period show that investors who bought bitcoin 3 to 6 months ago have an average cost basis near $85,000. The recent pullback in the $80,000 to $85,000 range has also been analysed as related to supply in that zone.

By contrast, buyers who entered over the past 1 week to 1 month have an average cost basis around $77,000, close to the current price range. That zone was presented as a sensitive short-term pivot. If prices slip further, those buyers could move into losses, increasing selling pressure, the analysis said. It also cited as a burden that, with demand not recovering sufficiently, the market is failing to absorb supply in rising price zones.

Technical analysis also showed resistance overhead. On a weekly chart, bitcoin formed a bearish engulfing candle while retesting the $80,000 to $85,000 range. That zone coincides with the 50 percent retracement level and the 20-week exponential moving average (EMA).

On short-term charts, some interpret the uptrend as having broken once. On a daily basis, bitcoin fell below the 20-day and 50-day moving averages and is moving in a box range in the mid-$70,000s. If the lower end breaks, the next support was presented at $70,000 to $72,000. If it regains the box range, the possibility opens of another challenge of the $80,000 to $85,000 zone.

Key points to watch are whether spot demand and ETF inflows recover, whether Treasury yields ease, and whether new catalysts emerge for bitcoin itself. Until then, the mid-$70,000 box range, resistance at $80,000 to $85,000 and support at $70,000 to $72,000 are likely to determine the short-term direction.