Bitcoin slipped below $77,000 on Monday during Asian trading hours, capping a weekly decline of roughly 4.8% and reaching its lowest level since early May. The world's largest cryptocurrency had briefly traded above $80,000 earlier in the previous week before momentum faded. The pullback came as rising bond yields, climbing oil prices, and renewed geopolitical worries cooled appetite for higher-beta assets across global markets.
Treasury yields told much of the story last week. The 30-year yield closed at 5.13%, its highest level since 2007, while the 10-year yield pushed past 4.5% and reached a 12-month high. Polymarket traders are now pricing a 98% probability that the Federal Reserve holds rates steady in June and a 94% probability of no move in July. Futures markets have also started to reflect modest odds of a rate hike later this year, a shift that increases the opportunity cost of holding non-yielding assets such as bitcoin.
The pressure on yields was reinforced by a fresh leg higher in oil prices. Brent crude rose 1.78% to roughly $111 per barrel, and WTI gained 2.2% to about $107, driven by reports of drone incidents in the United Arab Emirates and stalled diplomatic talks involving Iran. President Trump publicly warned that "time is ticking" for Iran to reach an agreement, raising concerns about a broader regional flare-up and adding to worries that energy-driven inflation could keep monetary policy tight for longer.
Sentiment indicators moved in step with the price action. According to The Block, the Bitcoin Fear and Greed Index slipped back to 27, close to the fear zone, after spending much of the week in a more neutral 40-50 range. Equity markets also softened, with the S&P 500 closing Friday down 1.2% and the Nasdaq down 1.5%, reflecting a broader rotation away from risk as investors recalibrated their expectations for monetary easing.
On-chain data offered a more nuanced picture. Glassnode figures showed that nearly 60% of the bitcoin supply has not moved in over a year, while exchange balances are sitting at a six-year low. Both metrics suggest that long-term holders remain largely inactive and that obvious spot selling pressure is contained. At the same time, the short-term holder MVRV ratio is below 1, indicating that recent buyers are, on average, underwater and may be more sensitive to additional macro-driven weakness.
Institutional flows reflected the cautious tone. According to CoinMarketCap, spot bitcoin ETFs recorded a weekly net outflow of about $1 billion in the week ended May 17, ending a six-week run of inflows. The shift likely reflects portfolio managers rotating toward cash and more defensive positioning as the timeline for Fed rate cuts continues to stretch out.
On the regulatory side, the CLARITY Act, the market structure bill currently advancing in Washington, continued to make progress last week. The legislation seeks to establish a clearer framework for the regulatory treatment of digital assets in the United States, dividing oversight responsibilities between the SEC and the CFTC and setting more defined rules for token issuers, exchanges, and other market participants. Senate Banking Committee members filed amendments, and lawmakers signaled ongoing engagement with the framework, building on optimism that helped lift bitcoin toward $82,000 earlier in the previous week. While the bill on its own did not provide a near-term catalyst for prices over the past few sessions, further progress could continue to support underlying sentiment in the digital assets market if it stays on track, and any delay or watering down of key provisions could weigh on confidence at the margin.
The coming week carries a lighter economic calendar but several potentially market-moving events. NVIDIA reports quarterly results on Wednesday and will likely set the tone for broader risk sentiment given its central role in the AI trade. U.S. PPI on Thursday will offer another read on whether inflationary pressures are broadening beyond energy, and the University of Michigan sentiment and inflation expectations data on Friday will round out the macro picture. Traders will also be watching for further movement on the CLARITY Act and any shift in tone from new Fed Chair Kevin Warsh on inflation and policy direction. For bitcoin, the $74,000 level stands out as a key downside support to monitor, while trading is likely to remain range-bound and headline-sensitive until one of the major macro signals breaks consensus and gives the market a clearer direction.