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▲ Bitcoin (BTC), oil price drop/ChatGPT generated image
Despite the U.S. government's announcement of a halt to military operations and news of diplomatic progress, Bitcoin (BTC) failed to hold the $78,000 mark, giving back all its gains and falling.
Virtual asset specialized media Bitcoin.com reported on May 21 (local time) that Bitcoin, after failing to maintain the $78,000 level, erased all its 24-hour gains and was pushed back to just shy of the $77,000 mark. Bitcoin had steadily risen from Wednesday afternoon to early Thursday, breaking the $78,000 barrier for the first time ever just before midnight from the $77,200 level. However, two powerful sell-offs quickly pushed it below $77,500, and by approximately 9:44 AM ET, it had plummeted to the $76,700 level. As of the time of reporting, Bitcoin is trading around $72,200, down 0.3% from 24 hours prior, and this process triggered cascading liquidations totaling $44.3 million across both long and short positions.
This downturn appears to be further entrenched after last weekend's market crash, which was fueled by fears that U.S. President Donald Trump was planning to resume military operations against Iran. Despite the Trump administration's abrupt postponement of airstrikes and indication of potential diplomatic agreement, buying momentum in the virtual asset market has not revived at all. In fact, Bitcoin has plunged by over $4,500, or approximately 6%, in just one week since May 14, giving back all gains made earlier this month. This coincides with the prolonged large-scale capital outflow from the U.S. Bitcoin spot ETF market, a key artery for the virtual asset market.
According to a Bloomberg report, U.S. Bitcoin spot ETF investors are currently using every minor price rebound not as a buying signal, but as an exit opportunity for 'de-risking'. It is assessed that by using every bounce as an exit window to offload holdings, they are completely suppressing the market's upward pressure. As capital outflow prolongs, even the conviction of long-term holders is wearing thin.
This cooling of investor sentiment is also interpreted as a signal of a decoupling between Bitcoin and traditional financial markets. Renowned virtual asset analyst The Great Martis declared on X (formerly Twitter) that the robust synchronized asset correlation between Bitcoin and the Nasdaq index has completely ended. Indeed, while Bitcoin experienced a slump, plummeting 40% from its recent cycle high, the Nasdaq index staged an overwhelming rally, surging 26% after the two assets decoupled.
Ultimately, the majority of smart money and whale investors have already quietly exited the digital asset market or completely abandoned their holdings, instead rotating large amounts of capital into high-performance semiconductor stocks that are yielding astronomical returns. As a result, the crypto market finds itself in a precarious situation, surviving not on fundamentals but merely on technical hope circuits and narrative propagation. The prevailing warning is that when the Nasdaq inevitably faces a technical correction in the future, Bitcoin's lackluster reality will be fully exposed, potentially triggering an unprecedented flight of capital from this high-risk, interest-free speculative asset. For the market to show a meaningful recovery, a completely new influx of retail investors is desperately needed.
*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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