Bitcoin’s downturn is deepening, fueling a rapid surge in bearish market sentiment. With significant capital exiting Bitcoin Spot ETFs and a cascading wave of leveraged long liquidations, a growing number of traders are now wagering on a potential drop below the critical $70,000 threshold before the end of May.
The flagship cryptocurrency recently plunged to a near six-week low of $72,669 within the last 24 hours, according to CoinGecko data. This heightened risk aversion is starkly reflected across various prediction markets, signaling a clear shift in investor confidence.
On the prediction platform Myriad, the probability of Bitcoin falling below $70,000 by month-end has skyrocketed by over 240% in just 24 hours. While still hovering around 27%, this dramatic increase underscores a palpable shift of capital towards bearish positions. Similarly, traders on Polymarket estimate a 26% chance of BTC breaching the $70,000 mark by May’s close.
Dual Pressure: ETF Outflows and Long Liquidations Intensify Bitcoin’s Slide
The primary catalysts behind this recent downturn are a relentless cascade of leveraged long liquidations and a significant exodus of funds from Bitcoin Spot Exchange-Traded Funds (ETFs). Data reveals that the cryptocurrency derivatives market experienced nearly $924 million in liquidations yesterday (May 28th), with a staggering $851 million stemming from long positions, indicating a severe blow to bullish traders.
“A substantial portion of this decline is attributable to the persistent and remarkably large outflows from Bitcoin ETFs,” noted analysts at Arctic Digital.
According to Farside Investors, US Bitcoin Spot ETFs have recorded over $1 billion in outflows in just the past two trading days, with approximately $733 million exiting on Wednesday alone. This marks eight consecutive trading days of net outflows for Bitcoin ETFs, accumulating to a staggering total withdrawal exceeding $2.6 billion.
Short-Term Caution, Long-Term Bearish Outlook: Is $50,000 the Ultimate Floor?
Despite the prevailing bearish sentiment, expectations for an immediate “cliff-edge collapse” remain subdued. For instance, Myriad’s data shows only a 3% probability of Bitcoin plummeting below $65,000 before the end of May.
However, extending the investment horizon paints a decidedly more conservative picture. On Polymarket, traders assign a 54% probability to Bitcoin dropping below $55,000 by 2026, with a 42% chance of it breaching the $50,000 level.
These longer-term projections echo earlier analyses. CryptoQuant, a quantitative analysis firm, previously identified $55,000 as the “ultimate bottom of the bear market” earlier this year. Meanwhile, analysts at Standard Chartered Bank suggested Bitcoin might first retest the $50,000 support before gathering momentum for a rally towards the $100,000 milestone.
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