Bitcoin held below $78,000 on Thursday, weighed down by persistent exchange-traded fund (ETF) redemptions, earlier leveraged liquidations, and cooling spot activity. The token traded near $77,500 after dipping close to $76,000 earlier in the week, with analysts pointing to a fragile technical backdrop and growing caution across derivatives markets.
ETF outflows extend, led by bitcoin and ethereum
Fresh data showed bitcoin ETFs logged $70.5 million in net outflows on May 20, extending a four-day streak of redemptions and capping more than $1 billion in net withdrawals from spot bitcoin products in the week ending May 15. That move ended a six-week run of positive inflows and underlined a pullback by institutional funds.
Ethereum products have been even weaker. Ethereum-tracking ETFs saw $28.1 million in outflows on May 20 alone, the eighth straight session of withdrawals and bringing total redemptions since May 7 to $504 million, an average of about $56 million per session. The string of exits signals fading institutional appetite for the second-largest cryptocurrency.
Leverage flush removes bullish positioning
The ETF selling has coincided with a sharp deleveraging in futures. On Monday, roughly $657 million in crypto futures positions were liquidated, including about $584 million from longs, the largest single-session clear-out since February.
The lopsided nature of the event, with nearly 89% of wiped positions betting on rising prices, has stripped a layer of optimistic buyers from the market. Open interest fell about 14% from its May 6 peak and has since stabilized between $36.6 billion and $37.8 billion, suggesting a thinner, more cautious leveraged backdrop and the potential for either subdued volatility or further downside exploration as markets reset.
Spot volumes cool and regional flows shift
Spot trading indicators also show weaker participation. Aggregate spot cumulative volume delta remained negative for nine consecutive sessions through May 19, implying net selling pressure. Hourly spot volumes are down around 40% compared with the same period in 2025.
Regional behavior has shifted over the past year. U.S.-based entities, which were net buyers through mid-2025, are now net sellers, while accumulation has increased among Asia-based participants. The pattern suggests a rotation in demand sources rather than uniform global selling.
Key onchain levels define fragile technical picture
Onchain pricing models and technical levels are clustering around a narrow zone. Analysts highlight $78,300 as a key level, marking bitcoin’s so‑called True Market Mean, a metric that has historically separated bearish from bullish phases. Bitcoin is currently trading below this level after failing to sustain a move toward $82,000, where the 200‑day moving average sits.
That rejection has turned the $82,000 area into a strong ceiling and signals that sellers currently control the trend. The 30‑day realized profit/loss ratio has climbed to 1.8 from 0.4 in February, showing that many holders have been using rallies to realize gains rather than add exposure.
Meanwhile, the 30‑day cost basis around $78,200 has flipped from support to resistance. Analysts now see the $71,400 zone as potential short‑term support based on prior accumulation, with Bitfinex placing bitcoin’s operative floor slightly higher, in the $76,300–$76,500 band, in line with the May monthly open. A clear break below that floor would signal weakening conviction among recent buyers and open the door to a deeper pullback. On the upside, resistance is projected near $85,900, close to the breakeven zone for holders who accumulated in late 2023 and early 2024.
Derivatives show rising demand for downside protection
Options data point to a more defensive stance. Bitcoin’s 25‑delta skew, which measures the relative cost of puts versus calls, has turned more negative, moving from 2.7% to 6.2% over the past week. That shift reflects a willingness to pay higher premiums for protection against further declines.
Over the past week, puts have accounted for 55.5% of total taker premiums, rising to more than 90% over the last 24 hours, highlighting a surge in demand for downside hedges. Around $2.5 billion in short‑gamma exposure sits near the $75,000 strike, leaving the spot price vulnerable to amplified swings if that level is retested, as option dealers adjust hedges more aggressively.
Despite the short‑term caution, onchain data hint at a different long‑term backdrop. The total supply of bitcoin held on exchanges has continued to fall throughout the recent volatility, indicating coins are moving into private wallets. This steady drain from exchange balances suggests ongoing accumulation by entities with longer horizons, a structural behavior that was less prominent in earlier market downturns.
Altcoins lag, but selective strength emerges
Alternative cryptocurrencies are broadly tracking bitcoin’s direction. Bitcoin’s market dominance remains around 60%, with most large-cap tokens underperforming over the past 90 days.
However, capital is not leaving the digital asset ecosystem uniformly. Products tracking Solana and XRP collectively attracted more than $122 million in a single week, in sharp contrast to the outflows from bitcoin and ethereum products. This divergence points to a rotation into specific names seen as offering better near-term potential.
The trend is echoed in price performance. Hyperliquid and Zcash have both delivered double-digit weekly gains, bucking the broader downtrend. Hyperliquid has pushed to new multi‑month highs, supported by strong trading activity on its platform, while Zcash has rallied to the point of flashing overbought readings on some momentum indicators, signaling aggressive buying.
Outlook: defensive and selective positioning
As of Thursday, bitcoin remained below $77,500. Market data suggest a sustained move above $80,000 would likely require a fresh wave of ETF inflows, renewed treasury accumulation, or a sharp short squeeze in derivatives. None of these catalysts is clearly visible in current trading flows.
Instead, the market appears to be adopting a more defensive and selective posture. Large outflows from major spot products, elevated demand for downside protection, and weakened U.S. participation are being offset by continued long-term accumulation off exchanges and targeted inflows into a handful of alternative assets.
The result is a more fragmented landscape, where performance hinges less on a broad market uptrend and more on asset-specific catalysts and relative strength.
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