Bitcoin Slides Nearly 10% as Fed Tightening Talk Intensifies; $766M Liquidated
Bitcoin extended its pullback as traders digested a sharp deleveraging shock, softer enthusiasm around ETFs, and renewed macro headwinds, according to a new Bitfinex report. The move coincided with the largest liquidation wave in three months, leaving the market struggling to regain traction after an early‑May high.
A May 23 flush wiped out $766 million in crypto positions, including $458 million in long liquidations, as geopolitical uncertainty and a 16‑month high in the US 10‑year Treasury yield pressured risk assets. Bitcoin dropped nearly 10% from its early‑May peak to an intraday low of $74,027. It briefly reclaimed the monthly open, but the rebound stalled near the weekly open.
Derivatives positioning shows the prior three‑week open‑interest build has been fully unwound. Funding rates have reset to neutral to slightly negative, suggesting leverage has largely been cleared out even as upside momentum remains fragile.
On-chain signals point to near-term holders under pressure. Bitcoin is trading below the Short‑Term Holder Realised Price around $78,600. The 30‑day accumulator cost basis broke after a close below $76,500, leaving a dense breakeven supply zone near $79,000. A broader resistance band is seen around $85,900. Analysts expect the $72,000–$82,000 UTXO "air gap" to frame trading unless fresh institutional demand emerges.
Capitulation signals remain limited. Exchange reserves are near seven‑year lows, and long‑term holder supply is steady at 14.43 million Bitcoin, indicating more passive profit-taking than widespread selling.
Macro conditions are also weighing on expectations for monetary easing. Inflation remains persistent across housing, energy, and services, complicating the Federal Reserve's path and diminishing the odds of near-term rate cuts. Elevated Treasury yields and firm energy prices reinforce concerns that inflation may stay above target. Consumer sentiment has fallen to a record low as purchasing power erodes, while long-term inflation expectations have risen sharply. Jobless claims remain low, but real wages have turned negative, leaving households strained despite steady employment.
In industry developments, Truth Social pulled its proposed spot Bitcoin ETF filings as competition intensifies and fees compress in the US ETF market. Analysts interpret the move as a sign that economics are deteriorating for smaller issuers competing against dominant players.
Separately, the US Department of Commerce pledged more than $2 billion in CHIPS Act incentives to quantum-computing firms, a step with long-term implications for blockchain security. More advanced quantum hardware could eventually threaten the cryptographic foundations of Bitcoin, accelerating efforts across the sector to develop post‑quantum protections.
