Analysis: Bitcoin surged and then fell, breaking below $80,000, with ETF outflows and geopolitical risks dampening market sentiment

Odaily Planet Daily News  Bitcoin fell below the $80,000 mark this week, ending a streak of five consecutive days of net inflows into spot ETFs, as the momentum from the February low rebound began to fade.

US non-farm payrolls for April increased by 115,000, higher than the expected 62,000, while the unemployment rate remained at 4.3%. Although the data was generally strong, it did not significantly alleviate market concerns about macroeconomic uncertainty; instead, it reinforced expectations that "energy-driven inflation limits the room for rate cuts."

In terms of capital flows, spot Bitcoin ETFs saw net outflows of $277 million on Thursday, ending a cumulative $1.69 billion inflow streak. Ethereum ETFs also recorded net outflows of $104 million on the same day, indicating a short-term cooling of institutional risk appetite.

On the geopolitical front, tensions between Iran and the US have escalated again, leading the market to re-price risks in the Strait of Hormuz. Oil prices rebounded, partially offsetting the support that risk assets had previously received from falling oil prices.

The derivatives market, meanwhile, reflects a more prolonged hawkish outlook, with interest rate futures pricing in a greater than 50% probability of rate hikes beyond 2027, suggesting the easing cycle may be delayed until 2028.

On-chain data shows that Bitcoin's recent rally was primarily driven by institutional spot buying and short covering, with retail participation remaining low. Funding rates are at moderate levels, indicating a relatively weak market momentum structure. Analysts believe that if retail capital does not return, BTC could still face a risk of retesting the $75,000–$78,000 support range. (The Block)