Over the past few weeks, Bitcoin has struggled to break above the $82,000 
price resistance and now trades near $78,000. While the integrity of either of 
these zones carries significant yet different implications for the flagship 
cryptocurrency’s growth, a crypto research and education group has revealed 
that several factors indicate a growing fragility in the market. Leveraged 
Risks On The Rise As ETF Outflows Surge In a recent Quicktake post on 
CryptoQuant, XWIN Research Japan delved into multiple on-chain signals that 
collectively flashed a signal of uncertainty for the Bitcoin market. The 
crypto research group began by citing Axel Adler Jr.’s Estimated Leverage 
Ratio (ELR). For context, the ELR measures the amount of leverage traders are 
using in the Bitcoin futures market by comparing open interest to the amount 
of BTC held on exchanges. In the Quicktake post, the education group 
highlighted that the ELR had surged toward 14.9% — a sign that traders are 
increasingly borrowing capital to maintain their bullish exposures. Related 
Reading: Why Bitcoin Price Could Be Forming A Consolidation Structure Around 
$80,000 XWIN Research Japan noted that although high leverage can boost prices 
in the near-term, “healthy bull markets are usually driven by spot demand.” 
According to the analytics firm, current conditions only increase the Bitcoin 
market’s vulnerability to sudden liquidation events. Notably, there have been 
significant surges in both Open Interest and Funding Rates, reflecting an 
overwhelming presence of long positions. XWIN Research Japan pointed out that 
this could be a dangerous scenario, as “long positions are now increasingly 
exposed to downside volatility” following Bitcoin’s recent move to $82,000, 
also driven by sell-side liquidity. Interestingly, all of these are ongoing, 
as US-based institutions seem to be on a hiatus (as reflected in a prolonged 
negative reading of the Coinbase Premium). More shockingly, US Spot Bitcoin 
ETFs saw almost $1 billion in capital outflows over the past week, according 
to XWIN Research Japan. To further paint a clear picture of the market 
situation, XWIN Research cited the lingering backdrop of worsening 
macroeconomic conditions. The crypto research group highlighted that the US 
10-year Treasury yield has surged to near 4.6%, while the 30-year yield jumped 
above 5%. — both of which reveal that the markets currently lean towards the 
“higher for longer” rates. Liquidity Still On The Sidelines: Research Group 
Despite these conditions, XWIN Research emphasized that the market remains 
definitely bearish. According to the group, Bitcoin Long-term Holders hold 
more than 15 million BTC, with more than 316,000 BTC entering the market over 
the past month. Furthermore, XWIN Research highlighted a concurrently growing 
liquidity pool on Binance (the world’s leading crypto exchange by trading 
volume), as reflected in its stablecoin inflows. Ultimately, the research 
institute highlighted the $78K–$79K range, which overlaps with the STH 
Realized Price. If this key level fails, XWIN Research expects bearish 
pressure to immediately rise. On the other hand, ETF flow stability should 
give Bitcoin some bullish thrust as the Coinbase Premium recovers. As of this 
writing, Bitcoin is worth about $78,194, recording a daily loss by 1.2%. 
Related Reading: Bitcoin Bottom Zone Now Lies Around $59,000 Based On This On- 
Chain Metric Featured image from iStock, chart from TradingView

Bitcoin At A Crossroads: These Are The Major Factors At Play

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Bitcoin traded in a narrow consolidation range on May 17 as traders monitored 
whether support near $77,700 could stabilize the broader bullish structure 
after the recent pullback from the $82,800 high. Market data showed BTC 
holding above the critical $78,000 zone while mixed technical indicators 
across multiple time frames reflected cautious sentiment and weakening bearish 
[…]

Bitcoin At A Crossroads: These Are The Major Factors At Play

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