Bitcoin's 2-Month Rally Over? Where is May's Trend Headed?

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Although Bitcoin continued its upward trend for two consecutive months, an analysis suggests that May's upward momentum may be limited due to institutional fund outflows and overlapping macroeconomic uncertainties.

According to investment media FXStreet on May 1 (local time), Bitcoin (BTC) is trading above $77,400, continuing its rebound after an early-week correction. However, the Federal Reserve's (Fed) hawkish stance combined with geopolitical risks in the Middle East is restricting risk asset appetite.

Institutional supply and demand appear shaky in the short term. According to SoSoValue data, US Bitcoin spot ETFs recorded a net outflow of $475.87 million by Thursday, raising the possibility of breaking a four-week inflow streak. However, on a monthly basis, April saw a total net inflow of $1.97 billion, marking two consecutive months of fund inflows, and if this trend continues, there remains room for further upside.

Corporate demand remains robust. Strategy recently purchased an additional 3,273 BTC for approximately $255 million, increasing its total holdings to 818,334 BTC. Despite an estimated unrealized loss of about $14.46 billion in Q1, the continued aggressive accumulation strategy is interpreted as a bottom-side support factor for the market.

The macroeconomic environment remains a burden. The Fed decided to keep interest rates frozen at 3.50%~3.75%, but internal dissent has expanded to its highest level since 1992, and the market is now pricing in over a 10% chance of a year-end rate hike instead of lowering expectations for rate cuts in 2026. Furthermore, the US-Iran conflict and rising energy prices are fueling inflation concerns, thereby limiting Bitcoin's upward movement.

Technically, the upward structure is maintained but is approaching a turning point. Bitcoin rose over 6% weekly, breaking past the $78,490 (Fibonacci 61.8%) resistance, but faced resistance near $80,000 and retreated to the $77,400 level. The weekly Relative Strength Index (RSI) is close to neutral at 46, suggesting a slowdown in downward momentum, while the Moving Average Convergence Divergence (MACD) has maintained a golden cross since mid-April, continuing to signal an uptrend. In the short term, $75,680 is a key support level, and on the upside, a break above $80,000 could open the door for further gains to $82,482 (100-week EMA).

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*