Bitcoin (BTC) kicks off in the last week of May and investors are positive about a $80,000 rebound – will it end in a liquidity grab?
- Bitcoin is recovering from its trip to monthly lows as shorts above $80,000 could be squeezed next.
- Excitement is growing over the U.S.-Iran peace deal, with stock markets already heading to record highs.
- Following the release of April’s PCE data, inflation pressures remain a concern for the Federal Reserve.
- Binance has seen a noticeably high net BTC inflow over the last ten days and added 16,000 BTC during the month.
- Research warns that Bitcoin faces multiple bear catalysts, predicting a “major liquidation” as a result.
Bitcoin shorts face “significant” pressure at $80,000
Bitcoin prices struggled over the weekend, falling below $75,000 to the lowest level since mid-April, according to TradingView data.
The rebound then brought $77,000 back into focus, which is consistent with optimism about a US-Iran peace deal.
BTC/USD Hourly Chart. Source: Cointelegraph/TradingView
In its latest market commentary, analyst account X Cryptic Trades called the decline “false,” noting its closeness to Bitcoin’s 2025 lows also seen in April this year.
“We observed a short break below the upper support range coinciding with the April 2025 low pattern.” – summarized.
BTC/USD 1-day chart. Source: Cryptic Trades/X
Cryptic Trades stated that BTC/USD needs to regain its daily rate bull market support team — “a strong reversal zone over the last few months” — to gain a bullish bias on a low time frame.
“Bulls need to hold this area to keep the short/medium term momentum in their favor,” trader Daan Crypto Trades Agreement.
BTC/USD weekly chart. Source: Daan Crypto Trades/X
Trader and analyst Lennaert Snyder called Bitcoin’s decline below $75,000 a “very good increase in liquidity.”
“A strong close of the day after the attack and the price breaks the previous daily highs,” he said he said X followers
“I’m bullish on Bitcoin on the day and still keeping an eye out for the 79/80 level to test again. It would be great if a 74.2k low could get us there. I’ll be keeping a close eye on 79/80k for quality shorts after my trigger.”
Trader CW also looked at the exchange’s order book liquidity for clues as to how high the price might go next.
“$BTC rose just ahead of high-leverage short zone. Coming rally will be short liquidation process” predicted.
“There is significant short pressure up to 80.5k.”
BTC liquidation heat map. Source: CW/X
Bets on an Iran peace deal are sending stocks to recent highs
There may finally be some good news for risky assets this week when it comes to the US-Iran war.
A peace agreement between the two sides appears closer than ever, and markets are already pricing in an end to the conflict.
U.S. stock futures rose at the weekly open, with the S&P 500 and Nasdaq 100 indexes reaching recent all-time highs. The Japanese stock exchange gained 3.5%.
One-hour chart for S&P 500 and Nasdaq 100 futures. Source: Cointelegraph/TradingView
Oil, however, began to fall, and WTI crude oil reached almost $90 per barrel.
CFDs on the one-day WTI crude oil chart. Source: Cointelegraph/TradingView
In the post regarding Social truthUS President Donald Trump pledged to reach an agreement that would be “good and right”.
“Unlike those before me who should have solved this problem years ago, I don’t make bad deals!” he wrote.
Source: Truth Social
Bitcoin’s reaction was more subdued, continuing last week’s trend when the stock market hit record highs failed to ignite growth dynamics for cryptocurrencies.
Nevertheless, market participants are already betting that the peace agreement will be another tailwind.
“I think Bitcoin is ready for higher fundamentals,” trader and analyst Michaël van de Poppe commented on X
Van de Poppe saw the BTC/USD rate rising above $80,000 if the deal goes into effect.
“That’s probably the plan,” he concluded, seeing that risky assets are performing well overall.
BTC/USDT 1-day chart. Source: Michaël van de Poppe/X
Inflation changes Fed’s hawkish nature ahead of PCE data
The deal would also mean good news for U.S. inflation trends, which have surged amid the economic crisis high oil prices.
This week, however, both markets and the Federal Reserve will have to grapple with the April printing of the personal consumption expenditures (PCE) index, which will reflect the full impact of the Iran conflict.
PCE, known as the Fed’s “preferred” inflation rate, will be the first measure for recent chairman Kevin Warsh.
US PCE percentage change (screenshot). Source: Office of Economic Analysis
It is still expected that policy may be tightened this year to contain inflationary pressures. In the latest issue of his regular newsletter “Market Mosaic”, a Mosaic Asset Company trading source noted that even Fed officials themselves have changed their tone.
“In a speech last week, Christopher Waller stated that ‘inflation is not headed in the right direction’ and ‘can no longer rule out further interest rate increases,'” it said, referring to a member of the Fed’s Board of Governors.
“Waller has previously been a major supporter of interest rate cuts due to concerns in the labor market.”
Fed target rate probabilities (screenshot). Source: CME Group
Data from the CME Group FedWatch tool Similarly, it highlights the lack of optimism regarding interest rate cuts before 2027.
While this is ostensibly a headwind for cryptocurrencies, Mosaic admitted that the rise in inflation in Iran may be “temporary” and shares are poised for further gains.
The “intensity” of Binance inflow is causing alarm
Geopolitical uncertainty prompted onchain analytics platform CryptoQuant to warn of a Bitcoin “sell signal.”
In one of his own QuickTake Blog Posts on Sunday, provider Darkfost signaled an almost 10-day impact of BTC on the world’s largest exchange, Binance.
“On May 16, the average weekly inflow on Binance was 378 BTC. Today it reaches 1,190 BTC, which is more than a 3-fold increase in less than 10 days,” he revealed.
“The largest single day recorded over 3,600 BTC on May 18, a relatively high level for a single day that clearly illustrates the intensity of the movement.”
Bitcoin network flows for Binance. Source: CryptoQuant
Darkfost noticed that Binance’s Bitcoin reserves increased by 16,000 BTC in one month.
“When inflows become dominant and consistent on a platform like Binance, it is traditionally interpreted as a potential sell signal,” he continued.
“Holders who transfer their BTC to an exchange most often do so with the intention of selling, whether it is to take profits, reduce exposure, or more defensively reposition.”
Last week – Cointelegraph reported to delicate demand in the US causing constant downward price pressure after the opening on Wall Street. The Coinbase Premium Index, which measures the price difference between Coinbase’s BTC/USD and Binance’s BTC/USDT pairs, has hit its largest negative value in several months.
Analysis warns of ‘major liquidation’
More bad news for Bitcoin bulls is CryptoQuant affiliate XWIN Japan described a cocktail of obstacles that remain insurmountable.
Related: Bitcoin Price Record 90-Day Uptrend ‘Resembles Bull Rally:’ New Analysis
In addition to delicate demand, institutional capital withdraws from US Bitcoin Exchange Traded Funds (ETFs).
“US Bitcoin spot ETFs have now seen cumulative outflows of over $1.74 billion while Coinbase Premium has turned deeply negative. Since this metric is often viewed as a proxy for US institutional spot demand, it suggests large investors are becoming less active buyers,” the QuickTake post reads.
Coinbase Premium Bitcoin Index. Source: CryptoQuant
Meanwhile, Binance’s net flows come as stablecoin volumes decline – a sign of degenerating liquidity and reduced risk appetite.
Meanwhile, investors who remain energetic are “aggressively long” and positive financing rates suggest that leverage is becoming more and more popular.
“The issue is that Open Interest remains well below the highs seen in late 2025. This suggests that the recent rebound is supported more by leveraged futures than by strong spot demand,” XWIN explained.
Bitcoin Interest Weighted Open Funding Rate (screenshot). Source: CoinGlass
Looking ahead, this combination of factors suggests that the market will experience a shake-up.
“Historically, periods of ETF outflows, negative Coinbase premium, weak spot demand, and crowded long positions have often preceded large liquidation events,” the post concluded.
“For now, Bitcoin looks less like a healthy bull market and more like a gentle rebound driven by leverage rather than real demand.”
