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▲ Bitcoin (BTC) ©CoinReaders
Bitcoin (BTC) has recovered the $77,000 level, buoyed by expectations of peace negotiations between the US and Iran. However, an analysis suggests that internal market warning signs are actually increasing due to a combination of ETF capital outflows and slowing on-chain demand. In particular, with leverage buying rapidly cooling, attention is focused on whether the short-term rebound can be sustained.
According to investment specialized media FXStreet on May 21 (local time), Bitcoin continued its gentle rebound, trading above $77,500 on the day. The market is being influenced by a revived risk asset preference sentiment due to the possibility of peace negotiations between the United States and Iran. US President Donald Trump mentioned that negotiations were “approaching the final stage,” but at the same time warned of the possibility of resuming military action if Iran rejected the demands. In response, Iranian President Masoud Pezeshkian countered, “Surrender under coercion is nothing but an illusion.”
However, institutional capital flows remain negative. According to SoSoValue data, US Bitcoin spot ETFs recorded a net outflow of approximately $70.47 million on Wednesday. This marks the fourth consecutive trading day of capital outflows for the US Bitcoin spot ETF market since last week. The media analyzed that if the current trend continues, the BTC price is likely to face downward pressure again.
On-chain data also indicates a slowdown in demand. CryptoQuant, in a recent report, diagnosed that overall Bitcoin demand has shifted into a net-decrease phase. It specifically noted that demand for perpetual futures, which led the April rally, has sharply declined near the $82,000 supply zone. This implies that additional buying pressure has weakened due to the liquidation of leveraged long positions. Spot demand is also contracting at a faster pace than before, and the Coinbase premium index, which reflects US investor demand, remains in negative territory.
The macroeconomic environment was also cited as a burden. The minutes from the US Federal Open Market Committee (FOMC) April meeting indicated that many Federal Reserve (Fed) officials mentioned the need to consider raising interest rates if inflation persisted above the target of 2%. Concerns were also raised that expanding Middle East risks could further complicate future policy decisions. The media assessed that if a high-interest rate environment continues, market liquidity could decrease, posing a burden on risk assets like BTC.
Technically, Bitcoin's confirmation of support near the 50-day and 100-day Exponential Moving Averages (EMA) at $76,812 and $76,903 earlier this week was positively assessed. However, BTC still remains below the 200-day EMA of $81,708. The Relative Strength Index (RSI) is at 48, showing a somewhat weak trend, and the Moving Average Convergence Divergence (MACD) is also still in negative territory. Upper resistance levels were suggested at $78,962, $81,708, and $83,437, while lower support levels were analyzed to be around $74,487 and $70,815.
*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.*
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