Bitcoin declined to approximately $74,600 on Saturday, slipping below a key support level that traders had been monitoring throughout the week. The drop was driven by continued outflows from U.S. spot bitcoin exchange-traded funds (ETFs) and rising bond yields, which dampened appetite for risk assets.
Trading volumes were thin over the weekend, with U.S. stock markets closed on Saturday and set to remain shut on Monday, May 25, for Memorial Day. This leaves the cryptocurrency market largely without directional cues from Wall Street's cash markets for most of the weekend.
Bitcoin traded 3.3% lower at $74,594, after swinging between $74,313 and $77,465 earlier in the session. Ether, the second-largest cryptocurrency by market capitalization, dropped 4.3% to $2,026.64, indicating that the sell-off extended beyond bitcoin.
Fund flows were a key driver of market sentiment this week. According to data from Farside Investors, U.S. spot bitcoin ETFs recorded net outflows for five consecutive trading days through May 22, with $648.6 million exiting on May 18 and another $105.2 million on Friday. This persistent selling pressure weighed heavily on bitcoin's price.
Bitcoin briefly dipped below $77,000 on Friday before recovering to near $77,700. Tim Sun, senior researcher at HashKey Group, told CoinDesk that he does not view this as a "structural trend reversal downward," adding that the $75,000 to $77,000 range remains a "well-defined" short-term floor. However, that floor is now under pressure.
Liquidations, or forced selling of leveraged positions, pose a heightened risk when weekend liquidity dries up. This risk is amplified if futures open interest—the total number of outstanding derivatives contracts—does not decline sufficiently to clear crowded bets.
Bitcoin is currently confined to the $76,000-$76,500 range, with $77,900-$78,500 identified as a potential breakout zone, according to Riya Sehgal, research analyst at Delta Exchange. She described the current chart pattern as a "contracting triangle," which traders often interpret as a narrowing range preceding a larger price move.
Global equity funds experienced outflows for the first time in nine weeks, with $6.13 billion exiting the market in the week to May 20, according to Reuters. Investors sold amid rising inflation concerns and climbing long-term borrowing costs. The 30-year U.S. Treasury yield reached 5.201% on Wednesday, a level not seen since 2007.
Despite the headwinds, some buyers remained active earlier in the week. Akshat Siddhant, lead quant analyst at Mudrex, noted that on-chain data indicated "buyers remain active at current levels," suggesting that bitcoin appeared to be recovering even amid macro uncertainty and ETF outflows.
Options markets have remained calm. "Bitcoin volatility has collapsed," said Shiliang Tang, managing partner at Monarq Asset Management, pointing to implied volatility—a measure of expected price swings derived from options prices. Low readings can indicate steady trading, though some analysts view them as a sign of complacency before a potential shift.
Crypto-linked stocks declined ahead of the weekend. Coinbase Global Inc (COIN) fell 4.4% on Friday to close at $184.99, while Strategy (MSTR), known for its significant bitcoin holdings, lost 3.0%, finishing at $159.89.
Bulls remain in the mix. Michael Saylor, executive chair of Strategy and a well-known bitcoin advocate, told CNBC that bitcoin would "rally from here" and is "going up forever." However, Investopedia also reported that spot bitcoin ETFs posted outflows for four straight business days through May 20.
The market may be confusing a pause with genuine support. If ETF outflows accelerate when U.S. markets reopen on Tuesday, or if Treasury yields fail to retreat, a clean move below $75,000 could trigger forced selling and threaten the May trading range. Conversely, lower interest rates, steadier oil prices, or renewed ETF demand could provide a lift, but traders may not have clarity until Wall Street returns.
