#Gate广场五月交易分享 Federal Reserve Chair Powell, Bitcoin Falls Below $80k!

As Bitcoin sharply fluctuates and breaks through the critical psychological level of $80k, the continuous inflow of nearly $1.7 billion into ETFs for five days suddenly halts, with a single-day net outflow of $277.5 million. Meanwhile, U.S. inflation data surges, and expectations for rate cuts are completely frozen. The Federal Reserve faces the most divided leadership transition in history—markets are shrouded in panic, bearish sentiment grows, and countless people are anxious: Is Bitcoin really finished?
The answer lies in data, cycles, macro patterns, and historical laws. Short-term declines are never about the destruction of value but are the most brutal and valuable reshuffles in a bull market process.

1. Triple Pressure Converges: Bitcoin Falling Below $80k Is Both Coincidence and Inevitable
This round of decline is not a sudden black swan but the result of resonant macro policies, capital flows, and market sentiment, each supported by clear data.
1. Inflation Data Shock: High interest rates lock liquidity, risk assets under pressure
U.S. April PPI data released, with month-over-month increase hitting the largest since March 2022, up 6.0% year-over-year, the highest since December 2022. Coupled with previously exceeding expectations CPI data, U.S. inflation rebound is a fact, directly shattering market expectations of rate cuts.
CME FedWatch tool clearly shows: the probability of a Fed rate cut in June is only 1.4%, with “longer-lasting high interest rates” becoming the market consensus. As a typical risk asset, Bitcoin is highly sensitive to liquidity; a strong dollar and rising financing costs directly suppress prices, becoming the core trigger for breaking below $80k.
2. ETF Capital Reversal: Short-term profit-taking by institutions, not long-term exit
On the same day Bitcoin’s price fell below $80, the U.S. spot Bitcoin ETF ended five consecutive days of net inflows, with a single-day outflow of $277.5 million—the first since May. Fidelity’s FBTC outflowed $129 million, BlackRock’s IBIT outflowed $98 million, leading the capital outflow.
But this is not institutional bearishness; it’s typical short-term profit-taking. The nearly $1.7 billion inflow over five days accumulated a lot of short-term profit positions. After touching a key level, funds took profits accordingly, which is normal market fluctuation. Notably, Morgan Stanley’s MSBT contrarily flowed in $7.3 million, never having experienced outflows since listing on April 8, with a total holding of 2,920 BTC, assets growing by 557%, demonstrating long-term institutional confidence in Bitcoin.
3. Federal Reserve Leadership Transition: Most Divisive Vote in History, Short-term Market Volatility
On May 14, the U.S. Senate approved Powell’s appointment as Fed Chair with 54 votes in favor and 45 against; earlier, on May 12, the Senate approved his appointment as Fed Governor for a 14-year term. Powell will officially assume office after White House procedures, replacing Powell’s term ending on May 15, while Powell will remain as a governor. This vote is the most partisan in Fed history: only one Democratic senator voted in favor, with the majority Republican. The policy stance is sharply divided. Powell’s focus on anti-inflation measures and hawkish policy orientation will further tighten market liquidity expectations in the short term, amplifying Bitcoin’s volatility.
4. Market Sentiment Cools: Fear Index Retreats, Panic Replaces Neutrality
Multiple negative factors combined, causing the cryptocurrency Fear & Greed Index to drop rapidly from the previous neutral 47 points to fear 38 points.
Despite Bitcoin rising about 11% over the past 30 days, well above the April average of 17 points, the short-term rapid decline has directly shattered market sentiment and amplified selling pressure.

2. Four Core Logics Prove Bitcoin’s Long-term Value Is Irreversible

Short-term volatility is driven by sentiment and capital, while long-term trends are dominated by value and cycles.
When stepping out of daily fluctuations, the core logic supporting Bitcoin’s upward movement is not only intact but continuously strengthening.
1. Historical Cycle Law: 35% Retracement, 77% Chance of New High Within a Year
Bitcoin’s maximum retracement from its all-time high of $126,200 has exceeded 50%, with a low below $60k. Now, it has rebounded above $80k, with retracement narrowed to 35%.
Research by network economist Timothy Peterson shows that Bitcoin has experienced nine instances of recovering from a 50% retracement to 35%, with seven of those reaching new highs within a year—77% success rate. The last similar cycle occurred at the end of the 2022 bear market, with the retracement narrowing to 35% by December 2023, and a new all-time high in March 2024. History doesn’t simply repeat, but it often rhymes—an objective law of Bitcoin’s cyclical behavior.
2. Supply Becomes Truly Scarce: Halving Effect Realized, Digital Gold Attributes Reinforced
The 2024 Bitcoin halving has completed, reducing block rewards from 6.25 to 3.125 BTC, with annual inflation dropping from 3.125% to 1.7%, below most global fiat inflation levels. Absolute scarcity on the supply side is Bitcoin’s core trait, distinguishing it from all other assets. As mining difficulty increases and new supply diminishes, circulating supply continues to tighten. Exchange reserves have fallen to 2.21 million BTC, the lowest since December 2017. Chips are concentrated among long-term holders, providing solid support for long-term price appreciation.
3. Institutionalization Is Irreversible: ETF Is Just the Beginning, Compliance Allocation Becomes Trend
The launch of U.S. spot Bitcoin ETFs marks Bitcoin’s entry into mainstream institutional portfolios. Despite short-term outflows, ETFs provide a convenient, secure channel for pension funds, family offices, mutual funds, and other compliant investors. Morgan Stanley’s MSBT continuous net inflow already proves large financial institutions’ recognition of Bitcoin. As regulatory frameworks improve and market awareness increases, institutional allocation will keep rising—from “optional” to “standard,” an irreversible trend.
4. Valuation System Rebuilding: Buffett Indicator Suggests Bitcoin Still in a Value Gap
Analyst Matthew Sigel, using the Buffett indicator (total U.S. stock market value / GDP), points out that Bitcoin’s relative valuation remains low. If Bitcoin reverts to valuation levels comparable to the current stock market, its target price could reach $160k. This is not hype but a normal expectation of assets returning to a reasonable valuation range.

3. Future Trajectory Panorama: Short-term Bottoming, Mid-term Breakout, Long-term New Highs
Combining macro policies, capital flows, cycle laws, and market sentiment, Bitcoin’s future trend is clear and can be divided into three stages:
1. Short-term (1-4 weeks): Consolidation at Support of $78k–$82k
Powell’s hawkish stance, subsequent inflation data, and ETF market hesitation will continue to suppress Bitcoin’s price. However, the $78k–$79,500 zone is a strong support area. Coupled with whale accumulation and ongoing inflows into MSBT, a sharp decline is unlikely. Market outlook: mainly consolidating, digesting negative news, repairing sentiment, with repeated tug-of-wars in the $78,000–$82k range.
2. Mid-term (1-3 months): Policy Clarity, Breakthrough Above $82k Opens Up Space
As the market adapts to Powell’s policy stance, the June FOMC meeting signals, and ETF capital resumes inflows, panic will quickly subside. Key signals: stabilizing above $82,000, filling the $84,000 gap, then challenging the $85,000 critical level, initiating a new upward channel.
3. Long-term (6-12 months): Driven by Cycles, High Probability of New Highs
Supply halving, institutional adoption, global monetary system changes, and resonant cycle laws will jointly push Bitcoin higher. With a 77% historical success rate, breaking new highs within a year is highly probable. Bitcoin’s long-term value will not weaken due to short-term dips but will become more prominent through cyclical refinement.