Short positions in U.S. stocks reach a record high! Analysis: Bitcoin is "decoupling" to become a hybrid asset, potentially becoming the second liquidity endpoint

Does the US stock market look calm on the surface, but actually hide turbulent undercurrents? A latest report by well-known analytics firm XWIN Research says that short positions in the US stock market have surged to a historical high, with hedge funds’ total leverage rate nearing 293%. However, this may be a turning point for Bitcoin. Data shows that since 2025, Bitcoin has been gradually “decoupling” from the S&P 500 index; driven by spot buy orders and ETF capital inflows, BTC is evolving from a pure “risk asset” into a “hybrid asset” with an independent market structure.
(Background briefing: Bitcoin volatility hits an 8-month low! Derivatives indicators suggest: a break above 82k will trigger a massive short squeeze)
(Additional context: Is Strategy selling Bitcoin bearish? MicroStrategy’s breakdown of 5 key financial logics)

Table of Contents

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• US stocks look strong externally but fragile internally: The “high-leverage vulnerability” masked by AI giants
• Bitcoin’s awakening: Evolving from a risk asset into a “hybrid asset”
• Future outlook: BTC is poised to become a “second liquidity endpoint”

The potential structural fragility of the US stock market is paving the way for Bitcoin (BTC)’s next move.

According to the latest market report released by well-known analytics firm XWIN Research, bearish interest in the US stock market (Short Interest) has surged to an all-time high. However, this is not simply a “bearish signal.” Behind it, the market structure is far more complex than it looks on the surface—something that is crucial for cryptocurrency investors.

US stocks look strong externally but fragile internally: The “high-leverage vulnerability” masked by AI giants

XWIN Research notes that institutional investors are not entirely pessimistic. While maintaining massive long positions, they have significantly increased hedging activities (Hedges). This has created a highly leveraged “gross-up” environment on Wall Street.

• Leverage ratio hits a record high: Latest market data shows that hedge funds’ total leverage has risen to an astonishing level of nearly 293%.
• Shorting indicators break records: Both the “Days-to-Cover” of the S&P 500 index and dollar-denominated short exposure based on US currency have reached historical highs, indicating that capital beneath the surface is becoming increasingly defensive.

The report analyzes that the main driver behind this phenomenon is that capital is overconcentrated in “AI-related large-cap tech stocks.” When capital keeps flowing into only a handful of giants, weaker sectors and small- to mid-cap stocks are facing steadily rising short pressure. As a result, the broader index appears stable on the surface, but internal market fragility is growing day by day.

Bitcoin’s awakening: Evolving from a risk asset into a “hybrid asset”

What does this structural shift in the US stock market mean for Bitcoin?

From historical experience, during major risk-off events, Bitcoin has often moved in the same direction as the US stock market. For example, during the stock crash triggered by the COVID-19 pandemic in 2020, Bitcoin fell alongside the US market and did not play the traditional “safe-haven” role. Between 2020 and 2022, BTC’s price trend also closely overlapped with the S&P 500 index.

However, XWIN Research emphasizes that since 2025, an important “decoupling divergence” has started to emerge.

Although the S&P 500 index has recently remained relatively stable, Bitcoin has shown notable price volatility. On-chain and market data indicate that strong spot buying order flow (Spot Taker CVD) and continuous inflows into Bitcoin spot ETFs suggest that BTC is increasingly being driven by its own “liquidity cycle, leverage dynamics, and institutional demand.” XWIN Research concludes in the report:

“This indicates that Bitcoin may be evolving from a pure ‘risk asset’ into a ‘hybrid asset class’—while it is still sensitive to overall economic liquidity, it has increasingly been able to follow its own market structure.”

Future outlook: BTC is poised to become a “second liquidity endpoint”

Looking ahead, if macroeconomic conditions shift toward the Federal Reserve (Fed)’s easing policies, the US dollar weakens, and another wave of ETF capital inflows arrives, XWIN Research believes Bitcoin will no longer be merely a follower of tech stocks’ rise and fall.

Instead, against the backdrop of rising fragility within the US stock market, Bitcoin is highly likely to stand out and become a “second liquidity destination” for global capital seeking growth, ushering in an independent trend for the crypto market.