Bitcoin (BTC) climbed back above $77,800 on Thursday as improving sentiment around a possible US-Iran peace agreement helped support risk assets across global markets. The rebound comes after several days of volatility, although underlying market data still points to cautious positioning from both institutional and on-chain participants.

Market optimism increased after Donald Trump said negotiations with Iran were approaching their final stage, while warning that military action could resume if talks fail. Meanwhile, Masoud Pezeshkian responded by rejecting any form of political pressure or forced surrender, keeping geopolitical uncertainty in focus.

Despite Bitcoin’s recovery, institutional appetite remains soft. US spot Bitcoin ETFs recorded another day of net outflows, extending a four-day streak of withdrawals. The continued selling pressure suggests large investors are still reluctant to increase exposure while macro uncertainty and resistance levels remain unresolved.

On-chain signals also show weakening momentum. Data from CryptoQuant indicates Bitcoin demand has shifted into contraction after the rally stalled near the $82K region. Analysts noted that much of April’s upside was fueled by leveraged futures activity, but traders have since started closing long positions, reducing buying pressure in the market.

Spot demand has also slowed, while the Coinbase Premium Index remains negative throughout May, signaling weak participation from US investors. Combined with declining ETF inflows and fading futures momentum, the broader structure suggests the recovery still lacks strong conviction.

At the macro level, the latest minutes from the Federal Open Market Committee reinforced a hawkish outlook from the Federal Reserve. Policymakers warned inflation risks remain elevated and additional rate hikes could still be considered if price pressures persist. Higher rates generally reduce market liquidity and tend to pressure speculative assets like Bitcoin.

Technically, Bitcoin continues trading below the key 200-day moving average near $81K, which remains the main resistance zone for bulls. BTC recently rebounded from the $60K demand area but is now struggling to maintain momentum beneath overhead resistance.

A successful breakout above this region could shift market sentiment and open the door for a move toward the $90K-$100K range. However, another rejection may increase the probability of a deeper correction, with initial support located around $76.2K.

Momentum indicators are beginning to flatten, and volume remains relatively weak compared to previous rallies, showing that buyers have not fully regained control yet.

Overall, Bitcoin is attempting to stabilize after its recent correction, but the market remains at a critical technical and macroeconomic crossroads.

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