Bitcoin dropped below the $80,000 threshold during late trading in New York on Wednesday, changing hands at $79,371. The decline came as fresh U.S. inflation figures and renewed outflows from spot bitcoin exchange-traded funds (ETFs) pressured the leading cryptocurrency toward the lower end of its recent trading range. The digital asset fell 1.6% on the session, after reaching an intraday high of $81,276 and touching a low near $78,762.
The move below $80,000 is significant because that level had served as a short-term battleground since bitcoin rebounded from a February dip. Data from Farside Investors showed that U.S. spot bitcoin ETFs recorded net outflows of $233.2 million on May 12, reversing the prior day's modest $27.2 million inflow. These funds track bitcoin's price on public markets without requiring direct ownership of the cryptocurrency.
The macroeconomic backdrop offered little support. The U.S. Bureau of Labor Statistics reported that producer prices rose 1.4% in April, the largest monthly increase since March 2022. On an annual basis, producer prices were up 6.0%. Ben Ayers, senior economist at Nationwide, warned that this could lead to "further increases for consumer prices in May." Stephen Stanley, chief economist at Santander U.S. Capital Markets, attributed the jump to an "energy price shock" rippling through the economy, as reported by Reuters.
Assets that are sensitive to risk-taking and easy monetary conditions typically struggle when interest rates remain elevated. UBS Global Wealth Management now expects the Federal Reserve to hold off on rate cuts until December 2026 and March 2027, pushing back its earlier projections of September and December of this year. "Conditions for a September move have not yet been met," analysts led by Andrew Dubinsky said. A basis point is one one-hundredth of a percentage point.
Bitcoin was not alone in its decline. Ether lost 1.3% to $2,255.55, while Solana dropped 4.1% to $90.89. Coinbase Global shares also slipped 2.9% to $201.80, reflecting broader weakness across both major digital coins and crypto-related equities.
Naeem Aslam of Zaye Capital Markets highlighted liquidity moves, inflation figures, swings in Treasury yields, the dollar's trajectory, geopolitical risks, and regulatory uncertainties as key factors influencing crypto markets. This backdrop explains the choppy action: bitcoin continues to attract dip buyers at key support levels, but with rates and oil-fueled inflation hanging over the market, there is less appetite for chasing rallies.
Glassnode described the recent price action as a "Rally Without Conviction." Analysts Chris Beamish, CryptoVizArt, and Antoine Colpaert noted that capital inflows have picked up to $2.8 billion per month—still far below the $10 billion-plus pace seen in previous bull runs. They identified $76,900 as immediate support and $86,900 as the closest resistance level.
Prediction markets reflected caution rather than outright pessimism. Kalshi assigned a 45% probability to bitcoin reaching $80,000 or higher by Friday at 5 p.m. EDT. On Polymarket, the likelihood of bitcoin trading in the $78,000 to $80,000 range on May 14 stood at 53%, with only 31% assigned to a move up to $80,000-$82,000.
The outlook for bulls is clouded by persistent ETF outflows and rising Treasury yields, which could quickly sap demand near the $80,000 level. An unexpected jump in inflation or another spike in energy prices might prompt traders to shift into cash and short-dated assets, exposing crypto to potential forced selling. Conversely, if inflation data cools, ETF inflows resume, or geopolitical tensions ease, bitcoin could rally sharply above $80,000. For now, volatility remains tight, and short-term players are locked into narrow trading bands.
