TLDR
- Bitcoin price has declined as institutional demand weakens and macroeconomic conditions tighten.
- U.S. inflation stands at 3.8%, while rising Treasury yields continue to pressure risk assets.
- Spot Bitcoin ETFs recorded nearly $1 billion in net outflows after a six-week inflow streak.
- On-chain capital flows remain low at $2.8 billion compared to levels seen in stronger market phases.
- Bitfinex reports that liquidity conditions have dropped to their weakest point since February.
- Analysts say the market recovery now depends on fresh capital entering the crypto market.
Bitcoin price has declined as macroeconomic conditions tighten and institutional demand weakens, according to Bitfinex. U.S. inflation remains elevated, while rising Treasury yields and shifting rate expectations pressure risk assets. Analysts say reduced capital inflows and ETF outflows have added to the recent pullback.
Bitcoin Price Pressured by Macro Shifts and ETF Outflows
Bitcoin price dropped to around $76,700, falling 6.5% from its weekly opening near $82,160. The decline follows weaker demand from institutional investors.
U.S. inflation reached 3.8% year-over-year in April, based on CPI data. At the same time, long-term Treasury yields climbed to multi-year highs.
Bitfinex said the macro backdrop has shifted toward a “higher-for-longer inflation environment.” This shift has reduced expectations for Federal Reserve rate cuts.
Analysts noted that rate hikes are now becoming more likely as the year progresses. This outlook has added pressure to crypto markets and other risk assets.
Spot Bitcoin ETFs ended a six-week inflow streak last week. They recorded nearly $1 billion in net outflows.
Analysts said ETF demand has been one of the main drivers of recent market momentum. The reversal signals weakening institutional participation.
On-chain capital flows currently stand at $2.8 billion. This figure remains well below the $10 billion linked to sustained bull markets.
Liquidity Conditions Weaken as Capital Inflows Slow
Bitfinex reported that liquidity conditions have deteriorated to their weakest levels since February. This trend has increased market sensitivity to external shocks.
The report highlighted two key demand sources under pressure. These include spot ETFs and yield-bearing products like Strategy’s STRC.
Analysts said both engines of demand are currently facing constraints. This has reduced overall market support for higher prices.
“As market sentiment transitions from acute fear toward persistent uncertainty, the recovery depends on fresh capital inflows,” analysts stated.
Bitcoin recently reached a two-week low as the correction continued. The price is now testing levels near the monthly opening range.
Analysts expect Bitcoin to trade between $72,000 and $80,000 in the near term. This range reflects current market conditions and liquidity levels.
The report emphasized the role of net capital flows in determining recovery strength. It pointed to the Realized Cap 30-Day Net Position Change metric.
Bitcoin previously rallied toward $82,000 earlier in the month. However, analysts said institutional conviction remained insufficient. As of the time of this writing, BTC was trading at $77,336 according to CoinMarketCap data.
