Bitcoin has weakened after failing to break above its 200-day moving average, a widely followed indicator of long-term trend direction. A new report from CryptoQuant attributes the reversal to a broad loss of momentum across key demand drivers that previously supported the rally.
The recent advance from February lows initially suggested the possibility of a stronger bullish phase, but that momentum stalled at the 200-day simple moving average (SMA) just above $82,000. After being rejected at that level, Bitcoin has retreated toward the $77,500 area. The setup is drawing comparisons to 2022, when a similar 40%+ recovery also failed at the same technical level before the broader downtrend continued.
CryptoQuant notes that the April–May rally was powered by a combination of leveraged futures positioning, robust spot buying, and steady inflows into U.S. Bitcoin ETFs. However, these supports have now begun to fade simultaneously, removing a key foundation that had been sustaining upward price action.
The firm’s Bull Score Index has dropped from 40 to 20, a level it labels “extremely bearish.” Historically, readings in this zone have aligned with weaker market phases, including the February–March range when Bitcoin traded between $60,000 and $66,000.
Demand indicators are also softening. The Coinbase Bitcoin premium has remained negative through both the rally and the subsequent pullback, signaling that U.S. investors are not paying higher prices on Coinbase compared to offshore exchanges—typically a sign of reduced domestic buying pressure.
Institutional flows reinforce the same trend. Data from SoSoValue shows U.S. spot Bitcoin ETFs recorded nearly $979.7 million in outflows for the week ending May 19, following about $1 billion in withdrawals the week before. This marks a sharp shift from six consecutive weeks of inflows that previously fueled the rally.
In Asia, sentiment has also cooled. Korea’s “kimchi premium” has slipped below zero, pointing to weaker local demand, while Hong Kong’s spot Bitcoin ETFs—run by ChinaAMC, Bosera HashKey, and Harvest—have seen subdued trading activity with limited daily volumes throughout May.
CryptoQuant highlights $70,000, based on traders’ realized price, as the key downside level to watch. The zone has historically acted as a major turning point in prior market cycles and may now serve as critical support if the correction extends further.
