Bitcoin fell below a key support, while Hyperliquid’s HYPE soared to new highs. Will pro-crypto regulation in the US provide fuel for BTC’s recovery?
Last week, the tide turned on crypto. The absence of positive newsflow tied to legislation and corporate adoption disrupted the narrative catalysts that have supported Bitcoin’s (BTC) price recovery over the past three months.
This slowing momentum translated into reduced capital inflows, as reflected in Bitcoin’s abrupt drop below $73,000 late in the week.
- Glassnode noted that spot Bitcoin ETF outflows have been daily occurrences since May 7, with the monthly outflows exceeding $2.5 billion by Thursday.
- Strategy paused its BTC accumulation and opted to repurchase bonds, with some analysts saying the company is the only thing propping up Bitcoin’s price.
- TD Cowen predicted that the CLARITY Act would not pass, citing “a worsening political environment.”
- Major media and investors zoomed in on a $1.29 billion sale of BlackRock’s IBIT spot Bitcoin ETF shares in a “dark pool” transaction. Some analysts believe it accelerated Bitcoin’s drop, while others remarked on how quickly “it was absorbed.”
- Active combat between the US and Iran resumed, propelling Bitcoin’s decline.
- Ethereum’s raison d'être discussion continued, with co-founder Vitalik Buterin saying the Ethereum Foundation will act as “one node among many” and sell less ETH going forward. Despite the comment, Ether still dropped below $2,000, levels not seen since March 29.
Markets Stumbled as Investor Sentiment Shifted
Two weeks of billion-dollar ETF outflows and Bitcoin’s subsequent return to its range lows near $70,000 dominated finance media headlines. Fortunately, it’s not all bad news.
Michael Nadeau, founder of The DeFi Report, said Bitcoin’s weak price action in 2026 was to be expected, though its percentage losses still lag those seen in previous market cycles.
Nadeau explained:
“We’re seeing a deviation so far in the current bear market. Losses are roughly half of what we saw in the past two bear markets, 231 days in.”
Given Bitcoin’s losses within a 231 day period cycle versus previous years, Nadeau says that “there are both bullish and bearish interpretations of this.”
On the other hand, Capriole Investments founder Charles Edwards shared an opposing view. He blamed a “diabolical inflation print” as a driving factor behind institutional selling.
Rising inflation backs institutional Bitcoin selling. Source: Charles Edwards / X
In the most recent edition of The Bitcoin Layer, head of research Johan Bergman argued that “the panic sellers are gone, and the holders have the allocation they want. Almost no financial force is moving the network right now.”
Read more: Privacy is Taking Over Crypto (Again) as Institutional Adoption Grows
Bergman added that BTC's sell-side risk ratio has collapsed to levels only seen in “the late stage of the 2023 bear market.” Perhaps this week’s weakness is simply part of that market consolidation process.
Bitcoin volatility and sell-side risk are at 3-year lows. Source: Johan Bergman / X
American investor and entrepreneur Anthony Pompliano told CNBC that now is the time to be buying Bitcoin.
Anthony Pompliano tells CNBC now is the time to buy Bitcoin. Source: X / The BTC Therapist
Pompliano said on a multi-year timeline, “Bitcoin and gold on a compound annual growth rate have been significantly outperforming.”
He added:
“While AI stocks are flying and everyone is chasing momentum and it's hitting all-time highs, usually the thing that you want to be buying is the thing that is out of favor, that's going to come back into favor.”
Ignore the Noise — The Infrastructure Is More Important
Beyond the negative price action, accelerating crypto integration by TradFi and beneficial changes to US regulation strengthen the foundation beneath the industry.
Last week, multiple outlets reported that Jeff Sprecher, CEO of the Intercontinental Exchange (ICE), was in talks with Hyperliquid exchange executives about its daily volumes, tokenized stocks, and weekend oil futures activity.
NYSE and Hyperliquid discuss trading volumes. Source: X / Fintechfrank
CFTC Chairman Mike Selig announced that the regulator will “permit the listing of a true Bitcoin perpetual contract by a CFTC-registered exchange.”
The CFTC approves Bitcoin perpetual futures contracts at CFTC-registered exchanges. Source: Mike Selig / X
In the same week, US Treasury Secretary Scott Bessent pressed the US Congress to pass the CLARITY Act. Meanwhile, SEC Chairman Paul Atkins reaffirmed the regulator’s dedication to maintaining the US as the crypto capital of the world.
SEC Chair Atkins says the US will lead in crypto innovation. Source: Paul Atkins / X
On the Radar
- Will a peace agreement between the US and Iran supercharge markets? Odds for a peace deal between the two remain high despite last week’s dual military actions.
- Will Strategy’s possible “inoculation” of the Bitcoin market pass, and will it buy more BTC? Strategy paused its BTC buying and is rumored to have sold some Bitcoin. Markets may learn more about this next week.
- Will the rumored SpaceX and OpenAI IPO(s) continue to pull mindshare and capital away from crypto markets?
- Will the spot Bitcoin ETF outflows continue and weigh on investor sentiment? ETF outflows pushed close to $3 billion in May, but data shows spot buyers absorbing BTC’s price lows. Will prices respond?
Read more: SpaceX’s IPO Is Coming, and Crypto Traders Are Already Betting on It
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
