Bitcoin: $1.6 Billion Inflow Evaporates... Will $70,000 Collapse Too?

▲ Bitcoin (BTC), cryptocurrency decline/AI-generated image

Bitcoin (BTC) fell below the $75,000 support level, once again facing downward pressure. The market's risk-aversion sentiment grew as Bitcoin spot ETF outflows, weak technical trends, and the possibility of the Federal Reserve raising interest rates this year all emerged simultaneously.

Benzinga reported on May 23 (local time) that Bitcoin's price pared some of its losses after falling below the critical $75,000 support level. According to the article, Bitcoin is facing a combination of negative factors: increased ETF outflows, bearish technical indicators, and the possibility of the Fed raising interest rates this year.

The biggest drag was identified as outflows from Bitcoin spot ETFs. Over $1.2 billion exited Bitcoin spot ETFs this week, a larger amount than the $1 billion outflow in the previous week. This outflow resulted in the wiping out of the $1.6 billion that had flowed in during the first six trading days of this month.

Benzinga pointed out that the continuous outflows from Bitcoin spot ETFs signal that institutional and smart money investors have become skeptical about the possibility of further short-term gains. In Friday's trading, $105 million exited Bitcoin spot ETFs, with IBIT and FBTC seeing outflows of $68 million and $36 million, respectively.

The macroeconomic environment also worked against Bitcoin. According to the article, U.S. inflation continued to rise, with analysts expecting the headline Consumer Price Index to increase from 3.8% in April to 4.2% in May. Benzinga reported that this trend increased the likelihood of the Fed raising interest rates this year, a change from the market's expectation of rate cuts earlier this year.

Geopolitical risks also weighed on investor sentiment. Concerns arose that U.S. President Donald Trump might launch new attacks against Iran, and Benzinga analyzed that such a move could further increase inflation and the likelihood of the Fed raising interest rates. Amidst these variables, the Crypto Fear & Greed Index dropped to 35, indicating "fear."

Technical trends also leaned bearish. Benzinga explained that Bitcoin had formed a rising wedge pattern in recent months and has now fallen below its lower trendline. Bitcoin also traded below its 50-day exponential moving average and showed a tendency to fall below the 23.6% Fibonacci retracement level.

Benzinga suggested that if these risks persist, Bitcoin's price could fall below $70,000. Conversely, if it surpasses the key resistance level of $80,000, the bearish outlook would be invalidated. With ETF outflows, Fed risks, and technical weakness converging, Bitcoin has entered a critical juncture to determine its short-term direction.

*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.*