Bitcoin fell as low as $76,551 during early Asian trading on Monday, marking its lowest level since May 1. According to Bloomberg reporting on May 18, widespread risk-aversion triggered by the Middle East situation led traders to dramatically reduce positions, resulting in nearly $500 million in liquidations across the crypto market within just 15 minutes.

What does this price action imply? On May 1, Bitcoin opened around $76,306. Over the following two weeks, it surged above $82,000 before declining for four consecutive trading days, erasing all monthly gains. For traders who chased the rally mid-month, profits turned into losses within 48 hours—so swiftly that there was little time to react.

PPI Rises 6% YoY to Three-Year High, Rate Hike Probability Up to 39%

The trigger for this round of selling was the U.S. April Producer Price Index (PPI) data released on May 13. According to the U.S. Bureau of Labor Statistics, PPI rose 1.4% month-over-month—the largest single-month increase since March 2022—and surged 6% year-over-year, reaching its highest level since December 2022, far exceeding the market consensus of 4.9%.

Energy prices were the primary driver. Gasoline prices jumped 15.6% month-over-month in April, while diesel prices increased 12.6%, reflecting the ongoing transmission of shock from the Iran conflict through supply chains. Even excluding food and energy, core PPI rose 1% month-over-month and 5.2% year-over-year, indicating that inflationary pressures extend beyond fuel pumps.

Carl Weinberg, Chief Economist at High Frequency Economics, warned after the PPI release that the data would trigger alarms at both the Federal Reserve and financial markets. The CME FedWatch tool indicates that the market-implied probability of a 25-basis-point rate hike this year has risen to approximately 39%, effectively eliminating any expectation of full-year rate cuts.

Just one day before the PPI release, April’s CPI rose 3.8% year-over-year—the highest since May 2023. According to CNN reporting, multiple economists have revised upward their forecasts for May’s CPI following the PPI release, anticipating it will breach 4%. The transmission of wholesale price pressures to consumer levels is accelerating.

ETF Six-Week Inflow Ends, Weekly Net Outflows Exceed $1 Billion

Macro pressure quickly filtered into institutional capital flows. According to SoSoValue data, the week ending May 15 saw approximately $1 billion in net outflows from U.S. spot Bitcoin ETFs, ending six consecutive weeks of net inflows. CoinShares’ report dated May 18 showed overall net outflows from digital asset investment products reached $10.7 billion—marking the third-largest weekly outflow since 2026.

James Butterfill, Research Director at CoinShares, stated that this shift “may reflect heightened geopolitical risk aversion linked to developments involving Iran.”

The prior six weeks recorded total net inflows of about $3.4 billion, averaging $568 million per week. April alone saw $1.97 billion in inflows—its strongest monthly performance since 2026. This accumulated momentum was reversed en masse this week. On May 13, a single-day net outflow of $635 million occurred—the largest daily loss of the week. On May 15, none of the 11 Bitcoin ETFs recorded positive inflows, adding another $290 million in outflows.

Ethereum spot ETFs also suffered five consecutive down days, with the week recording $255 million in net outflows. As of the weekend, cumulative net inflows into Bitcoin ETFs remained at $58.34 billion, with total assets under management reaching approximately $104.29 billion.

$657 Million Liquidated, 89% Long Positions

As ETF capital fled, the derivatives market underwent a brutal purge of long positions. According to Coinglass data, total liquidation value across the crypto market hit $657 million within 24 hours, with long positions accounting for roughly 89%. As reported by bitcoin.com, $584 million came from long liquidations; the Fear & Greed Index plummeted from a neutral 50 to 29 within days, entering the fear zone.

The chain reaction of leveraged liquidations accelerated the downturn. After Bitcoin breached key support levels, a wave of stop-losses and margin calls triggered a self-reinforcing spiral: “liquidation → selling → further liquidation.” LMAX Crypto Strategist Joel Kruger described the process as “forced unwinding and position cleansing” pushing Bitcoin below critical technical support levels.

Bitcoin is currently trading between $76,000 and $76,800, with the 50-day moving average at approximately $76,716 providing short-term support and the 200-day moving average near $83,513 acting as resistance.

Strategy Accumulates 20K BTC Amid Market Panic, Saylor Ignores Same Sentiment Report

While retail traders are liquidated and ETFs bleed capital, Strategy (formerly MicroStrategy) executed countercyclical moves during the same period.

According to a Form 8-K filed with the SEC on May 18, the company purchased 24,869 Bitcoin between May 11 and 17 at an aggregate cost of approximately $2.01 billion, averaging $80,985 per coin. This transaction brought Strategy’s total BTC holdings to 843,738 BTC, with a total cost basis of about $63.87 billion and an average acquisition price of roughly $75,700. The purchase was primarily funded through the sale of STRC preferred shares.

Strategy also disclosed that its “BTC yield” (a metric measuring Bitcoin holdings relative to diluted share count growth) since the beginning of 2026 reached 12.6%.

This is not the first time Saylor has added to his holdings during market panic. Throughout 2026, Strategy maintained a steady buying rhythm—weekly or bi-weekly—regardless of market direction. From January to May, the company increased its holdings from approximately 560,000 BTC to over 840,000 BTC, averaging nearly 60,000 BTC per month. While everyone was fixated on PPI data and ETF outflows, he spent another $200 million acquiring Bitcoin in the same week.

Goldman Sachs Q1 Clears XRP and Solana ETFs, Keeps Only Bitcoin

If Strategy’s actions represent the stance of a “Bitcoin maximalist,” Goldman Sachs’ Q1 13F filing presents a more representative institutional choice.

According to Goldman Sachs’ latest Q1 2026 13F filing, the firm fully divested all XRP and Solana ETF positions during the quarter. At the end of the previous quarter, Goldman held approximately $154 million in XRP-related ETFs (distributed across issuers such as Bitwise, Franklin Templeton, Grayscale, and 21Shares), along with over $100 million in Solana-related ETFs—now both positions are zero.

Ethereum ETF exposure was reduced by about 70%, falling from prior levels to approximately $114 million. Bitcoin ETF holdings remained largely unchanged at around $700 million to $720 million, with only a minor reduction of about 10%.

Meanwhile, Goldman Sachs increased its holdings in crypto infrastructure stocks: Circle shares rose 249%, Galaxy Digital increased by 205%, and Coinbase also saw additions. The signal is clear: Goldman Sachs is not exiting crypto—it is narrowing its bets—from broad exposure back to a “BTC-only” strategy.

According to CCN, Harvard University’s endowment fund also reduced its Bitcoin ETF holdings by 43% during the same period and completely exited Ethereum ETFs. Institutions are synchronously consolidating their crypto exposure into fewer, higher-conviction assets.

Author: Claude, DeepTide TechFlow