Gate Institutional Weekly: BTC Leveraged Longs Under Pressure, Gate Officially Launches Stock Trading (May 25–May 31, 2026)

  Summary

• The market repriced expectations for Fed rate hikes, and the crypto market remained under pressure. BTC fell by about 4.3% for the week, while ETH fell by about 4.8%; global crypto ETFs recorded net outflows for two consecutive weeks, with cumulative outflows reaching USD 2.54 billion.

• Total trading volume on TradFi Perp DEXs fell back to about USD 12 billion. Gate officially launched stock trading services, supporting more than 10,000 U.S. stocks and ETFs; the total number of TradFi assets continued to grow, and the expansion speed of the stock category led the industry.

• On-chain capital gathered toward platforms with deeper liquidity and higher execution efficiency. PancakeSwap trading volume surpassed Uniswap; the overall stablecoin supply changed only slightly, and funds did not concentrate into any single category of yield-bearing stablecoin products; the LST sector cooled, while the SOL ecosystem performed relatively steadily.

• DeFi risk appetite remained cautious. Aave lending scale continued to decline, and loan rates for Aave’s three core assets generally stabilized.

• In the derivatives market, BTC showed the characteristics of “falling prices, funding rates remaining positive, and volatility continuing to compress,” indicating that leveraged longs were still holding on to expectations of a rebound.

• Next week, the market will face tests from key macro data such as May nonfarm payrolls and the ISM Services PMI; in terms of token unlocks, close attention should be paid to the large HYPE unlock of about USD 684 million, which may have a relatively large impact on market liquidity and sentiment.

 1. Market Focus Analysis

  The Fed’s monetary policy stance remains the focus of the market. U.S. PCE inflation rose to 3.8%, the highest level since August 2023, and core PCE also rose. This triggered market concerns about Fed rate hikes. According to the CME FedWatch Tool, about 68% of traders expect at least a 25 bp rate hike before the end of 2026, while the probability of rate cuts for the full year is zero. The 30-year U.S. Treasury yield broke through 5.14%, and the Japanese 10-year government bond yield reached 2.8%, showing structural loosening in global fixed-income markets. In the energy market, the U.S.-Iran conflict has not fully subsided. On May 27, the two sides again launched a new round of attacks, pushing oil prices higher and intensifying inflation expectations, further suppressing market risk appetite. In the stock market, the S&P 500 and Nasdaq performed relatively strongly, as technology stocks driven by the AI sector continued to attract capital. Bitcoin, however, significantly underperformed the equity market. Some institutional analysts pointed out that funds are shifting from crypto assets to AI technology stocks.

  In the crypto market, BTC fell all the way from USD 77,027 on Monday last week, once dropping below USD 73,000 on Thursday, with a 7-day decline of about -4.3%; ETH also moved lower, reaching a weekly low of USD 1,967, down about -4.8%. Global crypto ETP products recorded net outflows for two consecutive weeks, with a combined two-week outflow of USD 2.54 billion, most of which came from the United States. Institutions generally adopted “de-risking” operations. Continuous ETF net outflows set the longest record since December 2025, and overall market sentiment remained cautious. On the regulatory side, there were reports that Bitcoin and Ethereum rose amid regulatory progress, while federal regulators spoke at the 2026 Bitcoin Conference with the aim of providing regulatory clarity on current key issues. Together, these factors formed a complex macroeconomic environment: inflation concerns persisted, the Fed policy outlook remained unclear, and the cryptocurrency market continued to be affected by regulatory developments. It is worth mentioning that Gate recently officially launched stock trading, allowing users to directly use USDT to trade assets from major U.S. securities markets within the platform. It currently supports more than 10,000 stocks and ETF assets.

2. Liquidity Analysis

2.1 BTC and ETH ETFs Continue to Show Significant Capital Outflows

  BTC ETF net outflows have continued for 14 days, breaking the longest net outflow record since December 2025. CoinShares data show that global crypto ETPs saw a combined net outflow of USD 2.54 billion over the past two weeks. Capital flows showed clear characteristics of “macro hedging + tactical position reduction.” Several institutional analysts pointed out that ETF outflows are essentially portfolio rebalancing by institutions treating BTC as a macro risk asset, rather than endogenous selling within the crypto market.

  ETH ETFs continued net outflows last week. As of May 28, they had recorded net outflows for 11 consecutive days, the longest net outflow record since March 2025. ETH ETFs as a whole performed weaker than BTC ETFs, and there were no clear signs of large institutional block purchases. Alternative ETFs such as XRP and SOL recorded net inflows during the same period, showing that some institutional capital was rotating into non-BTC/ETH assets.

  As of May 29, the total assets under management (AUM) of BTC ETFs were about USD 94.17 billion, accounting for 6.38% of Bitcoin’s total market capitalization, with historical cumulative net inflows reaching USD 55,714 million. The total net asset value of ETH ETFs was about USD 11.40 billion, accounting for about 4.5% of net assets, with historical cumulative net inflows of USD 11,404 million. From the perspective of institutional movements, capital flows showed clear divergence: BlackRock’s IBIT became the main source of BTC outflows last week, with weekly outflows reaching USD 966.3 million, while its ETH product ETHB recorded net inflows against the trend, indicating that institutions are making slight adjustments in allocation priorities across different assets.

2.2 TradFi Liquidity

• TradFi Perp DEX： Over the past week, the total trading volume of TradFi Perp DEXs fell significantly from the April high, dropping to about USD 12 billion and hitting a nearly two-month low. However, from a structural perspective, the market did not cool across the board, but showed clear asset-class rotation. Commodities remained the absolute dominant sector, accounting for more than about 60% of total trading volume, but cooled significantly from the previous USD 15-20 billion range, reflecting a decline in enthusiasm for safe-haven assets such as gold. At the same time, stock trading volume maintained a growth trend and its share continued to rise, showing that as U.S. stocks remained at high levels, on-chain investors were gradually shifting trading interest toward individual stocks and stock-related products.

• Gate TradFi Perp： Last week, overall volatility was relatively obvious, showing the characteristics of “rapid volume expansion - pullback - renewed volume expansion.” Precious metals remained the absolute dominant sector. Trading volume increased significantly from May 27 to May 28, with daily total turnover approaching USD 550-600 million, followed by a pullback. This shows that market funds were still mainly trading around gold-related products, reflecting that in the current macro environment, gold’s appeal as a safe-haven asset and trading target continues to exist. At the same time, the share of stock-contract turnover increased, with clear thickening on multiple trading days, showing that user participation in U.S. stock-related perpetual contracts is rising. Especially against the backdrop of U.S. stock indices recently approaching historical highs and AI and technology stocks remaining active, TradFi Perp has begun to meet part of crypto users’ demand for participating in U.S. equity trends. It is worth noting that Gate has recently continued to advance stock tokenization, TradFi asset access, and construction of a multi-asset trading system. Judging from changes in transaction structure, TradFi Perp is gradually evolving from a single gold trading market into a dual-core structure of “gold + U.S. stocks.”

• Number of CEX TradFi assets: Over the past week, the number of CEX TradFi asset categories further expanded. The total number of TradFi assets among three mainstream CEXs, counting only the TradFi and CFD sectors and excluding perpetual contracts, increased from 1,174 to 1,184, up 0.90% month-on-month. Among them, stocks grew the most significantly, rising from 809 to 819, up 1.20% month-on-month. The increase in stock count was contributed by Gate, whose TradFi stocks increased by 10 week-on-week, a rise of 2.3%.

• TradFi order-book depth： We selected XAUT, the TradFi asset with the highest trading volume, to analyze its order-book depth (Delta). Market depth showed relatively clear phased changes, and overall it can be divided into two stages: “liquidity supplementation in the first half of the week” and “liquidity withdrawal in the second half of the week.” In the first half of the week, the order book continuously recorded positive Delta, with a large number of bid and ask orders entering the market. The hourly net increase in liquidity exceeded USD 1 million many times. At the same time, the XAUT price remained range-bound between USD 4,500 and USD 4,550, and the trading environment was relatively stable. In the second half of the week, the liquidity structure weakened significantly, and order-book Delta stayed in negative territory for a long time. Although the price still operated around USD 4,500, market depth continued to decline, indicating that some liquidity providers began to reduce risk exposure or take profits and exit. From the relationship between price and depth, XAUT quickly recovered after a brief intraday pullback during the week, but order-book liquidity did not recover simultaneously and instead continued to weaken. This means that current price support depends more on active buying than on deep resting order liquidity. If gold prices experience further fluctuations in the future, the shallower order-book structure may amplify short-term price volatility. In the short term, attention should be paid to whether liquidity returns and to the absorption capacity in the USD 4,450-4,500 area.

3. On-Chain Data Insights

1. DEX Trading Shifts Toward Concentrated Liquidity, PancakeSwap Overtakes Uniswap

  Last week, overall DEX trading volume remained at a relatively high level, but the structure showed new changes. PancakeSwap rebounded significantly from the previous week and again surpassed Uniswap. Although Uniswap pulled back slightly, it still remained at a high trading center, and spot turnover demand for mainstream assets still existed. At the same time, Raydium, Meteora, and PumpSwap in the Solana ecosystem performed relatively weakly overall, and trading enthusiasm related to Meme and high-volatility assets cooled compared with before. Combined with the market environment, the overall single-day outflow scale of spot BTC ETFs was also at a relatively high level, and risk appetite in traditional markets declined. However, on-chain capital did not exit the trading market in tandem, but further concentrated toward platforms with deeper liquidity, lower transaction costs, and higher execution efficiency.

3.2 Stablecoins Enter a Period Dominated by Compliance and Payment Narratives, and USDC’s Infrastructure Advantage Continues to Strengthen

  Last week, the overall stablecoin supply changed only slightly, and neither USDT nor USDC saw obvious balance-sheet expansion. Assets such as USDS, USDe, PYUSD, and USD1 still maintained local growth, but funds did not concentrate into any single category of yield-bearing stablecoin products. Compared with changes in supply, competition at the stablecoin infrastructure level deserves more attention. On May 27, Circle launched ChainBench, further promoting multi-chain development, USDC integration, and agentic financial infrastructure construction. Previously, Circle also continued to expand USDC’s application scope in ecosystems such as Hyperliquid and strengthened its role in collateral, settlement, and cross-chain capital flows. At the same time, legislation related to stablecoins and market structure is still advancing, and the struggle between the banking system and the crypto industry over yield distribution, issuance models, and regulatory frameworks will continue to affect future product design.

3.3 The LST Sector Cools but Remains Stable, and the Market Reprices Cross-Chain and Security Premiums

  Last week, the LST sector entered a mild adjustment stage. TVL in ETH-side protocols such as Lido and StakeWise fell to varying degrees. Rocket Pool saw a relatively larger adjustment, but short-term changes were also affected by factors such as asset prices, TVL statistical methods, and capital reallocation. In contrast, the SOL ecosystem performed relatively steadily. Protocols such as Sanctum, Jito, and Jupiter Staked SOL basically maintained the previous week’s levels. From an industry perspective, Lido recently explained why it chose Chainlink CCIP for cross-chain expansion, with core concerns focused on cross-chain security, issuance control, and risk isolation mechanisms. As previous risk events related to KelpDAO and LayerZero triggered market discussion, institutional capital has significantly increased its attention to bridge security, redemption mechanisms, and governance transparency.

3.4 Aave Lending Balances Continue to Fall, and Risk-Appetite Repair Is Still Underway

  Last week, Aave lending scale continued to decline slightly. Major markets such as the Ethereum main market, Plasma, Arbitrum, and MegaETH were all below the previous week’s levels overall. Although lending demand still exists, the market has not yet recovered to the expansion pace before April’s risk events. The Ethereum market still occupies an absolutely dominant position, while Plasma and MegaETH, which previously absorbed some capital inflows, have also begun to enter a consolidation stage. Overall, the current lending market performance is consistent with the cooling risk-appetite environment. At the same time, Aave recently carried out governance discussions around optimizing the USDC liquidity buffer mechanism, unfreezing WETH and restoring LTV, and rotating Emergency Guardian signers, reflecting that the protocol is continuously improving its risk management framework and further institutionalizing previous emergency response experience.

3.5 Aave Core-Asset Rates Return to Normal Ranges, and the Market Has Moved Past the Liquidity-Shock Stage

  Loan rates for Aave’s three core assets generally stabilized. USDC and USDT borrowing costs fell compared with the earlier period, while WETH rates remained in a low and narrow fluctuation range. USDC remains the most closely watched pool of funds. Although there were still phased rate increases during the week, they lasted for a short time, and overall volatility was significantly weaker than in the previous high-utilization stage. Governance discussions around improving USDC liquidity-buffer capacity are essentially about enhancing the protocol’s stability and supply recovery capacity when facing extreme utilization rates. On the other hand, WETH borrowing costs did not rise significantly, and the market has not yet rebuilt large-scale directional ETH leveraged positions. Overall, current lending demand is more concentrated in stablecoin circulation, arbitrage, and position management. Panic has receded, but the market still maintains a certain degree of vigilance toward tail risks.

3.6 Protocol Revenue Returns to Being Driven by Financial Services, and Stablecoin and Trading Infrastructure Show Stronger Resilience

  Tether and Circle continued to rank near the top of the revenue list, and stablecoin issuance remains the most stable source of cash flow in the entire industry. Although Hyperliquid revenue cooled slightly from the previous week, it still remained at a high level, and demand for on-chain derivatives trading did not weaken significantly. By contrast, revenues of protocols such as Pump, PumpSwap, Phantom, and Axiom, which rely on front-end traffic and Meme trading activity, generally declined, indicating that speculative sentiment is gradually cooling. Aave V3 revenue fell slightly, basically consistent with the trend of lending-scale consolidation and rate normalization, and has returned to the normal operating stage. From the perspective of revenue structure, the change worth noting last week was that the market is shifting back from traffic-driven to financial-services-driven. Funds are still willing to pay for settlement capacity, leverage demand, liquidity services, and trading execution efficiency, but willingness to pay for pure traffic entrances and short-term attention assets is declining.

4. Derivatives Tracking

4.1 BTC Funding Rates Remain Positive but Price Is Weak, Leveraged Longs Under Pressure

  From May 25 to May 31, 2026, BTC prices overall showed a low-level oscillation structure after a one-sided decline. At the beginning of the week, the price was still near USD 77K, but then gradually weakened and fell back to the USD 73K-74K range from May 28 to May 31. Diverging from the price trend, funding rates continued to turn positive after May 26 and rose to the weekly high around May 28 to May 29, with the highest level approaching 0.01.

  The combination of “prices falling but funding rates remaining positive” shows that the market did not quickly shift toward crowded shorts during the decline. Instead, there were signs of leveraged longs buying the dip or passively holding positions. Longs continued to pay funding fees during the price decline, meaning that rebound expectations still existed, but prices failed to repair effectively, increasing pressure on long positions. In terms of OI, last week it generally fluctuated within the USD 25-26.5 billion range, significantly lower than the high at the beginning of the month. OI saw a phased rebound from May 27 to May 28, but prices did not strengthen simultaneously, indicating that new positions did not drive a trend reversal and may instead have intensified short-term divergence. Subsequently, OI fell again, showing that some leveraged positions were passively exited amid low-level volatility.

  Overall, last week the BTC derivatives market showed a structure of “positive funding rates + falling prices + low-level OI oscillation,” reflecting that the market has not yet entered panic-style deleveraging, but long crowding has increased. If the price later continues to break below support near USD 73K, long positions under a positive-funding-rate environment may face further clearing pressure.

4.2 Options Volume Falls First and Then Rises; the Rise in the Share of Daily Options Shows Stronger Short-Term Trading Demand

  Last week, BTC options trading volume overall showed a pattern of rising first and then falling. At the beginning of the week, trading volume remained at a relatively low level, about 14K on May 25, and gradually rebounded to the 20K-24K range from May 26 to May 27. On May 28, trading volume increased significantly, approaching 44K in a single day, the peak of the week. On May 29, it still remained at a high level of about 35K, showing that market trading and hedging demand increased significantly around month-end expiry.

  Structurally, monthly options still dominated. Especially during the volume expansion on May 28 and May 29, monthly options contributed the main increment, indicating that market participants were more inclined to adjust positions and manage risk through monthly contracts. At the same time, weekly and daily options also expanded simultaneously during the trading peak, reflecting a rise in short-term volatility trading and near-expiry hedging demand.

  From May 30 to May 31, options trading volume quickly fell back to low levels, indicating that after month-end concentrated rolling and expiry trades were completed, market activity cooled significantly. Overall, the expansion in options-market turnover last week was more driven by month-end expiry and price declines together, rather than sustained directional chasing or panic protection buying. The dominance of monthly options was strengthened, indicating that medium-term allocation and risk management remain the core trading logic of the options market.

4.3 25D Skew Repairs from Deep Negative Values, but Downside-Protection Premium Has Not Disappeared

  BTC 25D Skew across maturities remained in negative territory overall last week, mostly operating around -4 to -5.5. Compared with the deep negative value near -8 in mid-May, Skew had clearly repaired last week, but it did not turn neutral or positive, indicating that the market’s pricing of downside risk still existed.

  In terms of rhythm, around May 26, Skew across maturities once repaired, with 30D, 60D, and 90D Skew rebounding to around -3.5 to -4, showing that short-term protection demand had eased somewhat. However, as BTC prices continued to probe lower, Skew across maturities weakened slightly again from May 28 to May 31, indicating that during low-level price oscillation, the market still tended to retain a certain amount of put protection.

  Overall, Skew did not deteriorate extremely last week, showing that the market has not entered a panic-style risk-aversion state. But Skew remained negative, meaning that the options market is still paying a premium for downside risk. If BTC later breaks below the area near USD 73K, short-maturity Skew may quickly move lower again. If prices stabilize and rebound, Skew is expected to continue repairing toward neutral territory.

4.4 DVOL Continues to Decline, and Volatility Compresses Instead During Price Weakness

  Last week, the BTC volatility index DVOL generally fluctuated within the 34-38 range. At the beginning of the week, DVOL once fell to near 34, then rebounded to around 37-38 from May 27 to May 28 alongside the expansion in options trading volume, but failed to continue breaking upward. After May 29, DVOL fell again and remained around 36 near the weekend.

  Prices continued to weaken, but DVOL did not expand significantly, indicating that this round of decline was more of a slow downward move under low volatility rather than a rapid panic-style selloff. Combined with low-level OI oscillation and Skew remaining mildly negative, the derivatives market’s pricing of the decline was relatively restrained. Risk appetite weakened, but extreme risk aversion had not yet appeared.

  Overall, BTC is currently in a combination of “low price level, low volatility, and moderate protection demand.” This structure usually means that the market is waiting for a new directional catalyst. Once prices break below a key range or macro data triggers risk repricing, DVOL may quickly rise from low levels. Conversely, if prices stabilize, the low-volatility environment may continue.

5. Outlook

Data Source：

• Investing, https://investing.com/currencies/xau-usd-historical-data
• Gate, https://www.gate.com/trade/BTC_USDT
• CMC, https://coinmarketcap.com/real-world-assets/?type=all-tokens
• Coinglass, https://www.coinglass.com/pro/depth-delta
• Dune, https://dune.com/gateresearch/gate-tradfi#weekly-volume
• Dune, https://dune.com/gateresearch/gate-institutional-weekly-report
• Bybit, https://www.bybit.com/future-activity/en/tradfi
• Bitget, https://www.bitgettradfi.com/tradfi/XAUUSD
• CryptoQuant, https://cryptoquant.com/asset/btc/chart/derivatives
• Amberdata, https://pro.amberdata.io/options/deribit/btc/current/