Bitcoin's recovery from February lows hit a wall last week at the 200-day simple moving average just above $82,000, and has since pulled back to around $77,500.
Analytics firm CryptoQuant says the rally failed because demand from three key sources-leveraged futures buying, spot demand, and U.S. ETF inflows-has weakened. The firm's Bull Score Index has fallen from 40 to 20, a level it calls 'extremely bearish,' matching the February-March period when bitcoin traded between $60,000 and $66,000.
The Coinbase bitcoin premium, a measure of U.S. demand, has remained negative through much of the May rally and subsequent correction. U.S. spot bitcoin ETFs have flipped to sellers, losing about $979.7 million in the week ended May 19, on top of roughly $1 billion in outflows the prior week. This reversal follows six straight weeks of inflows.
Demand is also absent in Asia. Korea's kimchi premium has dropped below zero, and Hong Kong's three spot bitcoin ETFs have rarely cleared a few million dollars in combined daily volume through May.
If the correction deepens, CryptoQuant identifies $70,000, the traders' on-chain realized price, as the next major support. That level capped rallies in October and January; this time, it would have to hold them up.