Bitcoin (BTC) has fallen to $75,800, down 2.4% over the past 24 hours, marking its lowest level in May and extending the decline from previous sessions. According to latest reports, the cryptocurrency has slipped below $77,000 after Federal Reserve Governor Christopher Waller signaled openness to future rate hikes. Ether (ETH), solana (SOL), and XRP (XRP) are down a bit more than bitcoin, indicating broad-based weakness across the crypto market. The decline comes as Bitcoin began the month at roughly $77,000, putting its streak of three consecutive months in the green in jeopardy with more than a week remaining in May.
Kevin Warsh is set to be sworn as Fed chairman in a White House ceremony on Friday morning, marking a significant leadership transition for monetary policy. As reported by CoinDesk, Waller delivered the speech in Frankfurt under the title 'Policy Risks Have Changed.' He backed holding rates steady near-term but warned that persistent inflation may force a different outcome. Rate-futures traders responded quickly to Waller's comments, with the October 28 meeting now carrying roughly a 40% chance of a 25-basis-point hike. The shift aligns with PIMCO's Fed hike warning tied to the Iran war and rising oil prices, with headline CPI rising 0.6% in April and core PCE inflation reaching roughly 3.3% year-over-year. The FOMC Minutes for the April meeting, released on Wednesday, confirmed a hawkish tone among Federal Reserve officials, with the majority warning the central bank would likely need to consider raising interest rates if inflation continued to run persistently above the 2% target.
Institutional demand continued to weaken so far this week, with spot BTC ETFs recording an outflow of $1.15 billion through Thursday. According to SoSoValue data, unless Friday's inflows are very significant, BTC would mark the second week of $1 billion in weekly outflows, signaling weakening institutional demand and potentially leading to a price decline. US-based spot ETFs also turned net sellers, with 30-day ETF demand growth falling to its lowest level in nearly a month. CryptoQuant's weekly report highlighted that Bitcoin's overall demand has flipped into net contraction, as the driving force from perpetual futures demand has reversed sharply after prices hit the key overhead supply zone around $82,000 in the previous week. The Coinbase Bitcoin Price Premium chart has remained negative so far in the May rally and subsequent correction, confirming that US investor demand has not re-engaged at scale.
Bitcoin corrected more than 5% in the previous week after being rejected from the overhead supply near the 100-week Exponential Moving Average (EMA) at $82,299. The cryptocurrency closed the week below the 61.8% Fibonacci retracement level at $78,490 and is currently consolidating around $77,308 on Friday. Momentum is mixed, with the Relative Strength Index (RSI) slipping below the neutral level of 50, reading 46 on Friday, while the Moving Average Convergence Divergence (MACD) histogram remains firmly positive, hinting that bullish pressure is attempting to reassert itself despite the recent correction. On the downside, immediate support is provided by the 100-day and 50-day EMAs clustered just beneath spot at $76,902 and $76,824, respectively, with a daily close below this band opening the door toward the 38.2% Fibonacci retracement at $74,487. On the topside, initial resistance emerges at the 50% Fibonacci retracement at $78,962, ahead of the 200-day EMA at $81,720.
Mixed signals on a potential US-Iran peace deal continue to cap risk appetite among traders. A senior Iranian source said that no deal has been reached with the US, but also acknowledged that the gaps in positions between the two sides have narrowed. However, Iran's uranium enrichment and Tehran's control over the critical Strait of Hormuz remain among the sticking points. US President Donald Trump also said that the US does not want tolls on the Strait of Hormuz and added that the US military will retrieve Iran's stockpile of highly enriched uranium, keeping geopolitical risk premium in play and capping BTC upside moves. The Kobeissi Letter reported that Iran has introduced 'Hormuz Safe,' a Bitcoin-backed insurance service for shipping companies seeking to transit the Strait of Hormuz, with the Iranian government estimating the initiative could generate more than $10 billion in revenue. This development, if implemented, could boost Bitcoin demand in the near term, as 20% of global oil tankers pass through the Strait of Hormuz.
