Bitcoin slid to a three-week low over the weekend, dropping below $77,000 as a surge in U.S. Treasury yields triggered $672 million in crypto liquidations and the worst spot Bitcoin ETF outflows since late January.
The 10-year Treasury yield hit 4.63% on Sunday night, its highest since February 2025, up 70 basis points since the Iran War began. The yield is now four basis points above the level that prompted President Trump's 90-day tariff pause in April. With mortgage rates nearing 7% and the probability of a rate cut this year collapsing to 2%, the bond market is under severe pressure.
According to Diego Martin, CEO of Yellow Capital, the institutional transmission channel is now the key link. 'Geopolitical shocks no longer hit crypto directly. They hit Treasury yields, which hit risk appetite, which hits ETF flows, which hits Bitcoin,' Martin said.
Spot Bitcoin ETFs recorded $1 billion in net outflows for the week ending May 15, the largest weekly exit since late January when $1.49 billion left the funds. The prior week saw $622.75 million in net inflows.
Bitcoin was trading at around $76,770, down 2% in 24 hours, according to CoinGecko. The $77,000 level is critical. 'If $77,000 breaks while perpetual swap open interest remains elevated, a retest of $70,000 becomes a real scenario,' Martin warned.
Georgii Verbitski, derivatives trader and founder of TYMIO, noted that Bitcoin's muted recovery despite strong S&P 500 and Nasdaq gains suggests the market lacks organic demand. 'If the AI trade reverses, Bitcoin could face a much sharper downside move,' he said.
The next 48 hours of ETF flow data will be key.