Bitcoin’s bearish momentum hit hardest on the technical charts, with the cryptocurrency breaking below all major exponential moving averages early Monday.
Trade around $76,750, it was well below the 20-hour EMA at $77,580, the 50-hour at $78,120, the 100-hour at $78,767, and the 200-hour at $79,350.
MACD indicators strengthened the downward pressure, with the line at negative 359, the signal at negative 243 and the histogram at negative 116.
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Geopolitical shock hits an already weakened market
The slide started on Sunday evening after US President Donald Trump posted a period warning against Iran on Truth Social:
“The clock is ticking for Iran, and they better move FAST or there will be nothing left of them. TIME IS OF THE ESSENCE!” Trump wroteafter stalled diplomatic talks and a telephone conversation with Israeli Prime Minister Benjamin Netanyahu.
The post immediately threw the financial markets into turmoil. Oil prices rose. The US dollar strengthened. Investors were retreating from riskier assets – and Bitcoin was one of the first to feel it.
According to data from Coingecko, Bitcoin was trading at around $76,780 early Monday, down about 1.55% in the past 24 hours.
The day’s range went from a low of almost $76,680 to a high of $78,530. Trading volume exceeded $24 billion. The drop wiped out approximately $33 billion from Bitcoin’s market cap within hours.
ETF outflows had already set the stage
The Iran headlines ended up in a market that was already under pressure. American spot Bitcoin ETFs recorded a record single-day net withdrawal of $635 million on May 13 – the largest outflow since late January.
That figure helped push ETF funds to a total of $1 billion during the week, breaking a six-week inflow streak. Additional redemptions followed in subsequent sessions, indicating that institutional interest was waning after a period of strong buying numbers.
Wider circumstances made matters worse. The persistent inflation figures – both the PPI and the CPI – weighed on sentiment. Rising government bond yields created even more pressure. Low trading liquidity over the weekend amplified every move.
Bitcoin had rallied towards the $80,000 to $82,000 range earlier in May, supported by optimism around the Clarity Act. But repeated failures to break resistance left the market exposed. Profit taking made its appearance.
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Support and resistance in focus
Traders are now keeping a close eye on two key zones. Resistance is between $79,000 and $82,000. The downside support is around $74,000 to $76,000.
Relief remains possible if geopolitical tensions ease; oversold conditions could attract buyers. But if the Standoff between the US and Iran Deeper whether oil prices continue to rise, analysts say selling pressure is unlikely to ease any time soon.
Featured image by Atta Kenare/AFP via Getty Images|Charly Triballeau/AFP via Getty Images, chart from TradingView