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An image of Bitcoin /Yonhap

Bitcoin has declined by nearly 5% over the past week, continuing to trade within a tight box pattern in the $77,000 range. The lackluster performance is largely attributed to a massive wave of capital outflows from U.S. spot Bitcoin ETFs, which has significantly dampened institutional investor sentiment. Market experts forecast that this sideways consolidation is highly likely to persist for the time being until key macroeconomic uncertainties clear up.

According to the U.S. cryptocurrency exchange Coinbase on May 22, Bitcoin was trading at $77,225 as of 4:00 PM, down 0.3% from the previous day. This represents an approximate 5% drop compared to a week ago, with the top cryptocurrency sliding from the $82,000 handle to the $77,000 level since May 15.

Major altcoins followed suit in a broader market synchronized softening. At the same hour, Ethereum slipped 0.23% to change hands at $2,121.62, while XRP dropped 0.83% to settle at $1.36.

Analysts pinpoint the exodus of institutional capital as the primary driver behind the current stagnation. Data from crypto metrics provider SoSoValue reveals that the 11 U.S. spot Bitcoin ETFs logged a collective net outflow of $1.26 billion over the past five consecutive trading sessions. Notably, a staggering $635 million was pulled out on May 13 alone, marking the largest single-day net redemption since January 29. This aggressive wave of profit-taking wiped out all capital inflows recorded earlier this month, bringing the cumulative net outflows since the beginning of May to roughly $400000000.

The retreat in risk appetite was further exacerbated by brewing speculation that the Federal Reserve may push back the timeline for its interest rate cuts. With U.S. Treasury yields renewing their upward trajectory, institutional traders have increasingly opted to liquidate holdings for short-term profit realization.

Despite the near-term deadlock, market experts maintain that the long-term upward trajectory remains structurally intact. Jean-David Péquignot, Chief Commercial Officer at Deribit, noted, "Bitcoin’s implied volatility has plunged to historically low levels, rendering volatility exceptionally cheap in absolute terms." He diagnosed the current market phase as a compression zone before a definitive directional breakout.

Markus Thielen, founder of 10x Research, offered a matching assessment. "While ETF outflows and macroeconomic uncertainties are triggering a temporary price correction, the secular trend of expanding institutional demand has by no means broken," he analyzed. Meanwhile, Standard Chartered's Geoff Kendrick underscored the resilience of the asset class in a recent report. "While Bitcoin may undergo a brief period of short-term consolidation, the probability of registering a new all-time high within the year remains very much on the table," Kendrick stated. "The core variables for the second half of the year will boil down to the expansion of institutional allocations and a recovery in global liquidity."

                                                                                                                Kim Min-ju