Shock of $1 billion outflow for 2 consecutive weeks... Bitcoin trapped by hawkish Fed, will it eventually break $75,000?

▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©Coinreaders

Record capital outflows from institutional investors, coupled with warnings of further interest rate hikes from the U.S. Federal Reserve (Fed), are exerting heavy downward pressure across the entire risk asset market, including Bitcoin (BTC).

According to investment specialized media FXStreet on May 22 (local time), Bitcoin hit a strong long-term resistance wall near $82,000 last week, undergoing a correction of over 5%, and is currently continuing a precarious sideways trading within a box range, centered around the $77,000 mark. Looking at capital flows, a staggering net outflow of $1.15 billion was recorded in the U.S.-listed Bitcoin spot ETF market by Thursday, confirming a massive capital exodus exceeding $1 billion for two consecutive weeks. This indicates that institutional buying momentum is rapidly losing steam, and the Coinbase Premium Index, which represents demand from large U.S. exchanges, also consistently remained in negative territory, demonstrating an overall contraction in investor sentiment.

Furthermore, extreme geopolitical uncertainties surrounding peace negotiations between the U.S. and Iran are fueling investors' aversion to risk assets. Iran stated that some differences in positions with the U.S. have narrowed, but U.S. President Donald Trump and Secretary of State Marco Rubio are strongly confronting Iran over uranium enrichment and the issue of collecting tolls in the Strait of Hormuz, even hinting at the possibility of military intervention. However, during this process, news emerged that the Iranian government is pushing to introduce 'Hormuz Safe,' a $10 billion Bitcoin-based maritime insurance service for ships passing through the Strait of Hormuz to bypass U.S. financial sanctions. This simultaneously highlighted a long-term positive variable: the practical adoption of the asset in a strategic location where 20% of the world's oil tankers pass.

External macroeconomic conditions are further weighing heavily on the upside of the cryptocurrency market. According to the minutes of the April Federal Open Market Committee (FOMC) meeting released last Wednesday, a majority of Fed members are maintaining an extremely hawkish stance, indicating that they would consider further benchmark interest rate hikes if inflation persists. This prolonged high-interest rate environment depletes market liquidity and shifts funds to safe, high-yield bond assets, acting as a critical impediment to Bitcoin's demand recovery. CryptoQuant, a virtual asset on-chain data analysis firm, also reported recently that a large volume of long positions in the perpetual futures market, which drove the April rally, were liquidated near the $82,000 resistance level, and the total demand indicator, combining spot and futures, has entered a clear net contraction phase.

In technical structure analysis, Bitcoin also exhibits a vulnerable form, trapped like a sandwich between short-term defense lines and long-term resistance. On the weekly chart, Bitcoin has fallen below the Fibonacci 61.8% retracement level of $78,490, which connects the all-time high of $126,199 to the low of $60,000, and below the 100-week Exponential Moving Average (EMA) of $82,299. On the daily chart, the 50-day EMA ($76,824) and 100-day EMA ($76,902) are currently forming a tight support base just below the spot price, barely preventing a collapse. However, the long-term trend line, the 200-day EMA ($81,720), is blocking the path above, significantly reducing upward momentum. With the daily RSI falling to around 46 and the MACD histogram remaining below the zero line, it will be difficult to overcome selling pressure even if a rebound attempt occurs.

Consequently, Bitcoin is currently engaged in a tug-of-war at a critical juncture that will determine its future direction. Only if buyers decisively break through the short-term resistance of $78,962 and the $81,720 level where the 200-day EMA is located, with significant trading volume, will it be able to pursue a new era, reaching $83,437 and then $84,410. Conversely, if Middle East risks escalate again over the weekend or selling pressure accumulates, causing the cluster of 50-day and 100-day moving averages to break down, the psychological bottom line of $75,000 will first be tested. Subsequently, a painful corrective phase could unfold, leading to a further drop through the Fibonacci 38.2% level of $74,487 to the mid-term demand zone of $71,029.

*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.*