Welcome to The Market Runup! Every week, we’re diving into what happened in the crypto market onchain and off-chain, as well macro developments — so you can get smarter on your Sundays and prepare for the week ahead.

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Energy markets were the dominant macro driver this week, as uncertainty of a nuclear deal between the U.S. and Iran pushed crude prices sharply higher. WTI briefly moved above $100 and Brent crossed $114, before coming down on Friday after news of a new peace proposal from Iran.

Higher oil prices directly affect inflation expectations, so markets quickly began pricing in the probability that inflation could remain elevated longer than expected.

Such a macro climate makes for a complex twist of concerns for crypto investors: Rising inflation expectations reduce the likelihood of near-term rate cuts, tightening financial conditions and limiting investors’ appetite to take risks even though they have the liquidity to take advantage of opportunities.

Disregarding the energy markets, U.S. equities continued to rally, with the S&P 500 reaching new all-time highs and posting its strongest monthly performance since 2020.

This divergence was driven by a strong showing by Big Tech, with Microsoft, Meta, Amazon and Google indicating strong and continuing demand for their AI services and infrastructure. . Usually, geopolitical risk and energy shocks send equities spiraling, and that was indeed the case for much of March and April. But, spurred by Big Tech’s commentary around demand for AI, investors lately seem to be capitalizing on the fact that many major S&P 500 companies were trading at discounts to their projected earnings, and are showing signs of being cautiously optimistic once again. 

These trends once again reinforce crypto’s role as an asset that moves in line with the broader market. Bitcoin and Ethereum continued to trade in line with equities, suggesting that overall risk sentiment — not crypto-specific narratives — remains the primary driver.

Bitcoin rallied toward the $80,000 mark for the first time since February thanks to more than $2 billion in ETF inflows over the past week.

Flows were not uniform, but the directional trend showed consistent accumulation, particularly when the equity market was rallying. This suggests institutions are continuing to treat Bitcoin as a macro exposure tool rather than a speculative trade.

At the same time, prices action remained relatively controlled: there’s demand for the asset, but investors are continuing to be strategic about deployment.

Markets are increasingly focused on how the Federal Reserve will respond to rising energy-driven inflation pressures. Higher oil prices complicate the path to interest rate cuts, as inflation risks remain elevated.

This creates a challenging environment for riskier assets like crypto. While liquidity has not disappeared, the cost of capital remains high, forcing investors to be more selective in how and where they allocate.

This week on The Market Runup, I sat down with John Nahas, chief business officer at Ava Labs, to break down how macro conditions, institutional capital flows, and infrastructure development are shaping the next phase of crypto markets.

Nahas discussed why crypto continues trading closely in line with equities, and what ultimately needs to change for Bitcoin and digital assets to develop a more independent market identity. We also explored how elevated interest rates are impacting capital allocation decisions, particularly as investors weigh crypto exposure against rising Treasury yields and broader macro uncertainty.

Our conversation also covered liquidity and market structure. Nahas shared his perspective on the more than $300 billion currently sitting in stablecoins, what catalysts could drive that capital back into riskier assets, and whether current ETF inflows represent long-term institutional adoption or simply tactical macro positioning.

Finally, Nahas broke down how Avalanche is positioning itself for the next evolution of crypto markets through tokenization, real-world assets, app-specific chains, and on-chain financial infrastructure.

The percentages and metrics are based on a 7-day timeframe, unless noted otherwise.

This week highlighted a growing disconnect across markets.

On one hand, equities are pushing to new highs, seemingly ignoring geopolitics. On the other, energy markets are signaling rising inflation pressure, a dynamic that could eventually force a repricing across risk assets.

Crypto sits directly in the middle of this tension. Bitcoin is benefiting from institutional interest and the equity rally, but it remains constrained by the very forces impacting traditional markets.

Spot vs Derivatives Flows (what to watch):

Derivatives data continues to show caution beneath the surface. Bitcoin perpetual funding rates stayed near neutral to slightly negative for much of the week, with some exchanges showing funding around -0.008% every 8 hours. This signals traders are not aggressively chasing upside despite BTC approaching the $80,000 level.

Cross-asset correlations (what it tells you):

Crypto continues to trade closely alongside traditional risk assets, particularly during periods of volatility. Over the past week, Bitcoin’s 30-day correlation with the S&P 500 remained elevated near 0.52, while its correlation with the Nasdaq Composite hovered closer to 0.60. These levels are significantly higher than historical long-term averages, and reinforce how tightly crypto is tied to broader market sentiment right now.

The important shift is that this relationship is no longer simply directional; it has become increasingly synchronized intraday. Markets reacted almost simultaneously to macro catalysts this week, particularly oil price spikes, Treasury yield moves, and evolving Federal Reserve expectations: Bitcoin sold off alongside equities during periods of rising bond yields, and recovered in tandem as risk sentiment came down later in the week.

This synchronization is also visible in reactions to volatility. Realized volatility across BTC and tech equities compressed throughout April, while implied volatility rose around macro events tied to inflation and geopolitical developments. That suggests investors are increasingly trading crypto within the same macro framework as equities rather than treating it as an isolated asset class.

Institutional participation continues to reinforce this trend, as we covered above. Alongside the spot Bitcoin ETF movement, crypto hedge funds and macro desks appear to be using BTC as part of broader portfolio positioning tied to liquidity conditions, interest rates, and equity market exposure. 

The result is that crypto is becoming more integrated into the global risk asset complex rather than operating independently.

Risk appetite remains selective and increasingly bifurcated across crypto markets, with capital concentrating heavily in Bitcoin and institutional-facing products rather than rotating broadly into speculative sectors.

Bitcoin dominance climbed back into the 59%–61% range this week — the highest sustained level in months — reinforcing that investors continue to prefer BTC over higher-beta altcoins. 

Meanwhile, demand for Ethereum remained muted, and even more so for altcoins.

This divergence was also visible in ETF flows. Activity across smaller crypto products and altcoin-related funds remained comparatively subdued, contrasting with the strong demand for Bitcoin. 

Meanwhile, stablecoin market capitalization remains elevated near all-time highs. In previous cycles, rising stablecoin balances were typically followed by aggressive investment into higher-risk assets. This time, however, much of that capital has remained idle.

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This information is for entertainment purposes only. It should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research.