Why Did Bitcoin Fall Again? Is $78,000 the Last Line of Defense?

▲ Bitcoin Plunge ©

Bitcoin is wavering above the $78,000 defense line, with institutional fund outflows and macroeconomic instability simultaneously pressuring its price.

According to CoinMarketCap, a cryptocurrency market data aggregator, Bitcoin (BTC) fell 1.01% to $78,180.66 in the past 24 hours as of May 17 (local time). Amid a general market downturn, Bitcoin showed an 80% correlation with the S&P 500 over 30 days, demonstrating sensitivity to interest rates and macroeconomic variables.

The key background for the decline is deteriorating institutional demand. According to SoSoValue, US spot Bitcoin ETFs recorded a net outflow of $290 million on May 15, breaking a six-week streak of inflows. Additionally, concerns about US inflation weakened expectations for interest rate cuts, and rising tensions between the US and Iran over the Strait of Hormuz strengthened risk aversion.

Liquidations in the derivatives market also amplified the decline. As selling pressure increased, $164.33 million worth of Bitcoin long positions were liquidated within 24 hours, a 75% surge from the previous day. Simultaneously, miners are reported to have sold approximately 800 BTC, worth about $64 million, over four days, adding to the supply burden.

The short-term turning point is the $78,000 support level. If this price point is maintained, Bitcoin could retest its 200-day simple moving average of approximately $80,326. Conversely, if it breaks below $78,000, the selling pressure could extend to the $74,000 to $75,000 range.

The market is simultaneously watching ETF fund flows, geopolitical news, and the stability of open interest and funding rates. While bearish pressure dominates in the short term, buying sentiment could revive if a daily close above $80,326 is confirmed.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*