Cryptocurrency markets experienced significant pressure on Thursday, with the total market capitalization falling approximately 4% over the past 24 hours to around $2.48 trillion, according to CoinGecko data. Bitcoin (BTC) dropped from the $76,000 region to hit a five-week low below $73,000 before recovering slightly at press time. Ethereum (ETH) fell more than 5% below the $2,000 mark, with the cryptocurrency printing $1,988.27 on May 28, down 4.2% on the day and 6.5% over the week. Major altcoins including Solana (SOL), XRP (XRP), BNB (BNB), Dogecoin (DOGE), and Hyperliquid (HYPE) recorded losses ranging between 6% and 14%. The Fear and Greed index sat at 32 (Fear) on May 28, reflecting deteriorating market sentiment across the broader cryptocurrency ecosystem.
U.S. spot Bitcoin ETFs recorded $733 million in net outflows on Wednesday, marking the largest single-day withdrawal since February this year and extending their losing streak to eight consecutive trading sessions. As reported by CoinGlass data, cumulative withdrawals from U.S. spot Bitcoin ETFs have now reached $2.33 billion over the past two weeks. Meanwhile, spot Ethereum ETFs extended their own outflow streak to 12 straight days after another $67 million exited the funds on Wednesday. According to Bitfinex analysts, Bitcoin's market structure weakened after a recent $766 million liquidation event, with futures open interest dropping sharply after Bitcoin corrected more than 10% from highs above $82,000. The ETH-specific record open interest build of 16 million ETH represents a leverage build that often precedes sharp liquidation events, with CoinGlass-style liquidation maps for ETH clustering around $1,950, $1,900, and $1,850 over the past 24 hours.
Over $900 million worth of crypto positions were liquidated across the derivatives market over the past 24 hours, with bullish long positions accounting for most of the wipeout, according to CoinGlass data. The latest decline accelerated after Bitcoin lost support near $75,000 while Ethereum broke below the $2,100 area, triggering another cascade of forced liquidations across leveraged trading platforms. As exchanges automatically closed underwater bullish positions, the additional forced selling added pressure to spot prices and intensified downside momentum across the broader market. ETH funding rates stayed mildly positive through most of May, then flipped neutral as price slid this week, with futures open interest climbing even as spot kept selling, indicating fresh shorts are entering rather than longs unwinding.
Investor sentiment deteriorated as military tensions between the United States and Iran intensified again this week. WTI crude futures climbed 2.6% to trade above $91 per barrel on Thursday, while Brent crude rose toward the $96 region after reports emerged that U.S. forces struck Iranian military targets believed to threaten commercial shipping routes near the Strait of Hormuz. Iran's Revolutionary Guard reportedly targeted a U.S. airbase, though officials did not disclose the location. Negotiations between both countries remain deadlocked, with Iran reportedly insisting on retaining control over the Strait of Hormuz and preserving its nuclear program as part of any potential agreement.
Rising energy prices added to fears that inflation could remain elevated for longer, potentially reducing the likelihood of near-term Federal Reserve interest-rate cuts and tightening liquidity conditions for speculative assets such as cryptocurrencies. The combination of a falling spot price and rising derivatives book represents a setup that markets tend to resolve quickly, with liquidations on whichever side gets the next push. Bitfinex analysts noted that options traders continued paying premiums for downside protection ahead of Thursday's U.S. Personal Consumption Expenditures report, the Federal Reserve's preferred inflation gauge. The analysts highlighted that a hot print for PCE on Thursday would increase stress on the leverage-long book by shifting the rate path outlook, while an in-line print would remove the macro catalyst, forcing the range to resolve purely on positioning dynamics.
