[markets] — Bitcoin dropped below $77,000 on May 18 as US-Iran geopolitical tensions pushed investors into a risk-off posture, capping a four-day losing streak that accelerated outflows from US spot ETFs to their steepest single-day reading in months.
US spot Bitcoin ETFs recorded a net outflow of $648.6 million on May 18, according to SoSoValue data cited by Wu Blockchain. That brought cumulative weekly Bitcoin ETF outflows to more than $1 billion, the third-worst week year-to-date. Ethereum ETFs extended their own losing run: BlackRock's ETHA saw $55.4 million exit, Fidelity's FETH shed $14.7 million, and the products as a group logged a sixth consecutive day of net outflows. Bitcoin's price touched $77,027 at 07:02 UTC on May 19, according to CoinDesk data.
K33 Research published a note on May 19 arguing the current downturn looks nothing like 2018 or 2022. Head of research Vetle Lunde wrote that Bitcoin's 30-day average funding rate has stayed negative for 81 consecutive days — nearing its record — while annualized basis on CME Bitcoin futures recently fell below 2.5%, a level associated with extreme caution. "Derivatives data instead points to uniquely pessimistic sentiment," Lunde wrote. The absence of the leverage rebuild that preceded prior cycle collapses, K33 argues, caps the downside potential: there is less forced selling waiting to cascade. The firm's base case remains that February's slide to $60,000 was the cycle's maximum drawdown. "The less aggressive bull market of 2025 sets the stage for a more moderate bear market in 2026," Lunde wrote.
K33 flagged two live risks. Open interest across Bitcoin derivatives remains elevated, leaving room for a volatility event if prices soften further. And the firm noted a historical pattern of ETF holders selling more aggressively when prices recover back near breakeven — a pattern that appeared to be forming as BTC hovered near the average cost basis of many ETF buyers. K33's proprietary indicators, the firm said, more closely resemble the March–April 2025 bottom than a classic bear-market rally.
The ETF flow signal itself is new. Spot Bitcoin ETFs did not exist during the 2022 or 2018 drawdowns. A single day of $648.6 million in net redemptions from regulated US products is a different kind of data point than anything available in prior cycles — it shows institutional positioning in near-real-time. Whether it is a leading indicator of further selling or a flush that clears weak holders is the question K33's framework addresses: with leverage already compressed, the argument goes, the ETF outflow pool is less likely to be followed by a derivative-driven amplification spiral.