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▲ Bitcoin (BTC), S&P 500/AI Generated Image
Bitcoin (BTC) is once again pushed to the bottom of its channel. Amid a confluence of ETF outflows and tensions from Iran, the market is bracing for a potential drop to $62,000.
Lark Davis, host of the cryptocurrency podcast The Lark Davis Show, stated in an episode on May 28 (local time) that Bitcoin is trading more like a speculative asset on Wall Street than a safe-haven asset. He explained that oil prices rose and the market was shaken after the US struck an Iranian military base near the Strait of Hormuz. He suggested that if the stock market undergoes a deeper correction, cryptocurrencies could face additional pressure.
Davis identified recent Bitcoin ETF outflows as the biggest bearish factor. According to the video, $733 million flowed out of Bitcoin ETFs in one day. Outflows of $648 million occurred on May 18, and $630 million on May 13. He stated that Wall Street views Bitcoin not as an ideal hedge asset but as a speculative target to be aggressively bought and sold.
The technical structure is also unstable. Bitcoin is testing the bottom of its channel again after being rejected near the 200-day exponential moving average. Davis warned that while a temporary dip below the channel followed by a recovery is tolerable, a large daily candle closing below the channel could lead to a drop to $62,000. On a weekly basis, the 200-week exponential moving average was presented around $68,000 to $69,000, and the 200-week simple moving average around $63,000 to $64,000.
He did not rule out the possibility of a rebound. Davis holds long positions in Bitcoin and Ethereum (ETH), setting a target price of $80,000 for Bitcoin and $2,100 for Ethereum. However, he stated that his stop-loss was set below the bottom of the Bitcoin channel and below Ethereum's daily low. Ethereum had lost its previous support and showed a bearish trend, but he attempted a contrarian trade based on the premise that the market reaction was excessive.
For Solana (SOL), the $76 to $77 support level was presented as a key zone. Davis explained that Solana has been moving within a broad range since a sharp drop in early February, with the top at $98. He believed that if it falls below $77, short positions could be activated, accelerating the decline. He pointed out that Pump.fun's price remains near its all-time low despite $1 million in daily fees, $370 million in purchases, and 36% of its circulating supply being bought and burned. Hyperliquid (HYPE) has entered a correction phase, with $50 presented as a price of interest.
Davis believed that the cryptocurrency market has not yet escaped bearish pressure. Bitcoin is simultaneously facing ETF outflows, tensions from Iran, the risk of a stock market correction, and pressure at the bottom of its channel. Ethereum and Solana are near key support levels, and Pump.fun and Hyperliquid have not confirmed price recovery. The next direction will be determined by Bitcoin's defense of the channel bottom, ETF fund flows, and news related to Iran.
*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.*
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