Bitcoin recovered from February lows to about $77,336.25 during the recent rally and pushed toward the 200-day simple moving average (SMA), which sits just above $82,000. The price hit resistance just above that SMA and then reversed, pulling back to about $77,500 after the move. A comparable 43% relief rally in 2022 also failed at the 200-day SMA before bitcoin resumed its prior decline.
The recent decline in Bitcoin’s price is marked by several weakening demand indicators. One of the significant signals is the drop in CryptoQuant’s Bull Score Index, which fell from 40 to 20, indicating an extremely bearish sentiment in the market. This score is an indicator of investor sentiment and market momentum, and such a sharp decline suggests substantial weakening in buying interest.
Additionally, the negative Coinbase premium played a crucial role during May’s price movements. The premium indicates whether Bitcoin is trading at a higher price on Coinbase compared to other offshore exchanges. A negative premium suggests that U.S. investors are not willing to pay a higher price, reflecting weaker demand from U.S. markets. This phenomenon was particularly evident during May’s rally and subsequent correction.
Further emphasizing the weakening demand is the selling pressure in U.S. spot Bitcoin ETFs. According to SoSoValue, there were approximately $979.7 million in outflows in the week ended May 19, following about $1 billion of outflows the previous week. These significant outflows from ETFs are indicative of reduced institutional interest and a shift towards selling rather than accumulating Bitcoin.
Broader market and international factors have significantly impacted Bitcoin’s recent price movements. In Korea, the kimchi premium, which measures the price difference between Bitcoin on Korean exchanges compared to international ones, dropped below zero. This indicates that South Korean investors are less inclined to pay a premium for Bitcoin, suggesting weakening local demand.
In Hong Kong, trading volumes for the three spot Bitcoin ETFs, namely ChinaAMC, Bosera Hashkey, and Harvest, remained low throughout May. These ETFs rarely cleared more than a few million dollars in combined daily volume, reflecting limited investor interest and engagement in the region.
The rallies observed in April and early May were primarily driven by leveraged futures buying, spot demand, and substantial U.S. ETF inflows. However, these factors have since shown signs of weakening, contributing to the reduced upward momentum in Bitcoin’s price. Meanwhile, WLFI’s dominance in the balance sheet, as reported in the latest SEC filings, highlights its significant role in the current market dynamics. These elements combined illustrate a complex web of regional and international influences that have played a role in Bitcoin’s recent market performance.
Bitcoin hit resistance at the 200-day simple moving average and reversed after recovering from February lows, resulting in a pullback from the recent rally.
Multiple demand indicators weakened: CryptoQuant’s Bull Score fell sharply, the Coinbase premium remained negative through May’s rally and correction, U.S. spot bitcoin ETFs recorded substantial outflows in mid‑May, Korea’s kimchi premium dropped below zero, Hong Kong spot ETFs saw low volumes, the April and early May rally drivers weakened, and WLFI dominates the balance sheet per the latest SEC filing.
