Analysis: Bitcoin drops below $77k, geopolitical conflicts and inflation concerns trigger sell-off

Odaily Planet Daily News: Bitcoin falls below the $77,000 mark, with a low of approximately $76,720. Analysts believe that the market decline is mainly driven by multiple macroeconomic factors, including escalating tensions between the US and Iran, rising inflation concerns, and increased risk aversion toward risk assets. Former US President Trump issued a stern warning to Iran on social media, intensifying geopolitical uncertainty.

Meanwhile, rising crude oil prices further boost inflation expectations, with Brent crude rising to about $111 and WTI exceeding $107, sparking concerns that the Federal Reserve may keep interest rates high for a longer period.

Current selling pressure is also compounded by rising US Treasury yields, a strengthening dollar, and outflows from ETF funds. Data shows that Bitcoin ETFs experienced net outflows of about $1 billion in the week ending May 17, ending six consecutive weeks of net inflows.

In terms of market sentiment, the Bitcoin Fear and Greed Index fell back to 27, returning to the “fear” zone. Analysts believe that the short-term trend will still heavily depend on macroeconomic data and policy expectations, but some institutions consider the current correction to be more of a “healthy digestion,” with the long-term structure remaining unchanged. (The Block)