On May 28, Bitcoin experienced a significant drop of approximately 3%, bringing its price down to US$72,739 (AU$101,107). This marked a six-week low for the cryptocurrency, with an intra-day fall to US$72,669 (AU$101,010), placing it around 42% below its all-time high of US$126,080 (AU$175,251).
Traders in prediction markets significantly adjusted their expectations regarding Bitcoin’s performance, with the likelihood of it closing below US$70,000 (AU$97,000) for May soaring to 27%, a 240% increase within 24 hours. Polymarket similarly pegged this outcome at 26%. Other prediction markets suggest a broader bearish outlook, indicating a 54% probability that Bitcoin could drop below US$55,000 (AU$76,000) before 2027 and a 42% chance of falling under US$50,000 (AU$69,000) during 2026.
In a stark reflection of the market conditions, a Robinhood contract priced Bitcoin closing at US$73,300 (AU$101,000) or higher near 99 cents, while the prospect of it closing at US$74,000 (AU$102,000) drew interest at just 2 cents as the deadline approached.
The notable price decline coincided with a spree of leveraged liquidations and considerable outflows from Exchange-Traded Funds (ETFs). During a tumultuous 24 hours, nearly US$924 million (AU$1.28 billion) of leveraged crypto futures positions were liquidated, with about US$851 million (AU$1.18 billion) stemming from long positions. This incident highlights the ongoing volatility within the crypto markets and the risks that come with leveraged trading.
Additionally, Bitcoin spot ETFs have markedly uneven performance, shedding over US$1 billion (AU$1.39 billion) in just two trading days. Last Wednesday alone saw net outflows of US$733 million (AU$1.02 billion), with a cumulative total of US$2.6 billion (AU$3.61 billion) pulled during an eight-day streak of losses. According to analysts from Arctic Digital, these ETF redemptions are illustrated as significant contributors to the current market weakness rather than merely a consequence of existing trends.
Overall, the recent downturn in Bitcoin prices has raised concerns among investors and traders alike, signalling a turbulent environment for cryptocurrency markets.
