Bitcoin slid below $77,000 on Monday, May 18, extending a four-day decline driven by surging oil prices, multi-year highs in US Treasury yields, and diminishing expectations for near-term Federal Reserve rate relief. The move triggered over $600 million in liquidations across the crypto derivatives market, with long positions bearing the brunt of the losses.

Macro Headwinds Intensify Across Multiple Fronts

The 30-year US Treasury yield rose to 5.13%, its highest closing level since June 2007, while the 10-year yield climbed to 4.54%, a level not seen since May 2025. The increases followed hotter-than-expected inflation data, with April’s Consumer Price Index showing consumer prices rising 3.8% year over year, driven largely by elevated energy costs linked to ongoing geopolitical tensions near the Strait of Hormuz.

Brent crude oil traded between $110 and $112 per barrel on the day, continuing a multi-week rally fueled by Middle East supply disruptions. The combination of rising yields and energy prices has squeezed risk appetite across global markets, with prediction-market traders on Polymarket pricing a 98% probability that the Federal Reserve will hold rates steady in June and 94% in July. Some market participants have shifted from expecting rate cuts in 2026 to pricing potential hikes, with CME FedWatch data showing a 44% probability of a rate increase by December.

Liquidation Cascade Hits Leveraged Positions

According to data from CoinGlass, total crypto liquidations reached approximately $657 million over a 24-hour period, with long positions accounting for more than $584 million of the total. Bitcoin touched an intraday low near $76,000, its lowest level since early May, effectively erasing gains from the prior week when the asset briefly traded above $82,000.

The CoinMarketCap Fear and Greed Index fell to 39, placing market sentiment firmly in the “fear” zone. Bitcoin’s 50-day exponential moving average sits near $76,716, now acting as immediate support, while the 200-day EMA at $83,513 represents overhead resistance that has capped rallies in recent weeks.

On-Chain Data Presents a More Nuanced Picture

Despite the sharp price decline, several on-chain indicators suggest the selloff may be driven more by macro positioning than by a fundamental shift in holder behavior. Long-term holders currently control approximately 15.26 million BTC, with over 316,000 BTC moving into long-term holder status over the past 30 days, according to CryptoQuant data. Exchange balances remain near six-year lows, indicating that the available sell-side float continues to contract.

However, short-term holders who purchased Bitcoin at higher levels remain underwater, creating a cohort that is more vulnerable to forced selling during periods of macro stress. The Short-Term Holder Realized Price, which currently sits in the $78,000 to $79,000 range, represents a critical threshold. A sustained break below this level could trigger additional selling pressure, while a recovery above it would likely stabilize near-term sentiment.

Bitcoin traded near $76,869 at the time of writing, down approximately 2.5% over the past 24 hours. Whether the current decline deepens or reverses will likely depend on upcoming Treasury auction results, further developments in energy markets, and any shifts in Federal Reserve communication regarding the path of interest rates.

About XT Exchange

Founded in 2018, XT Exchange is a leading global digital asset trading platform, serving over 12 million registered users across more than 200 countries and regions, with an ecosystem reach exceeding 40 million. XT Exchange supports 1,300+ tokens and 1,300+ trading pairs, offering a wide range of trading options, including spot, margin, and futures, alongside a secure RWA (Real World Assets) marketplace. Guided by the vision ‘Xplore Crypto, Trade with Trust,’ the platform strives to provide a secure, trusted, and intuitive trading experience.