Bitcoin struggles below $80,000 amid institutional withdrawal

Key takeaways

• Bitcoin has dipped below $80,000 after being rejected by the key 200-day EMA supply zone.
• US-listed spot ETFs recorded an outflow of $635 million on Wednesday.

Bitcoin (BTC) fell below $80,000 on Thursday after failing to overcome a key overhead supply area earlier this week. 

The pullback is attributed to fading institutional demand, with spot Exchange Traded Funds (ETFs) experiencing significant outflows, as well as a surge in traders’ profit-taking activity, increasing selling pressure on the leading cryptocurrency.

Highest single-day ETF outflow in three months signals weakening institutional demand

Institutional demand for Bitcoin has weakened, with spot ETFs recording a massive outflow of $635.23 million on Wednesday, the highest single-day withdrawal since the end of January. 

According to CoinGlass data, this marks the second consecutive day of withdrawals this week. If outflows persist or intensify, Bitcoin’s price correction could continue, further amplifying the bearish pressure.

Profit-taking among Bitcoin holders has surged, further adding to the selling pressure. CryptoQuant’s weekly report highlights that 14,600 BTC were realized in daily profits on May 4, the highest figure since December 10. 

The 37% rally from the April lows has brought Bitcoin holders back into profitable territory, triggering a wave of selling. This kind of behavior typically precedes further price declines, as traders capitalize on their gains.

Bitcoin price forecast: BTC could dip below $79,000

Bitcoin is trading at $79,458 on Thursday, having faced rejection from the overhead supply zone. 

The cryptocurrency has corrected for three consecutive days this week but is still holding above the 50-day and 100-day Exponential Moving Averages (EMAs), which are clustered just under $76,800. 

Despite this, Bitcoin remains capped below the 200-day EMA at $81,986 and the key 61.8% Fibonacci retracement at $83,437.

While the broader uptrend remains intact, the technical outlook suggests a cautious approach. The Relative Strength Index (RSI) hovers in the mid-50s, indicating a mild bullish bias, but the Moving Average Convergence Divergence (MACD) line is still in negative territory, hinting at tentative upside momentum.

If the bearish trend persists, immediate support is found at the 50% Fibonacci retracement level around $78,962, followed by the 100-day EMA at $76,756 and the 50-day EMA at $76,479. 

If selling accelerates, further support lies at the 38.2% Fibonacci retracement near $74,487 and the broken upward trendline around $70,171.

On the upside, bulls need to clear the 200-day EMA at $81,986 to ease immediate pressure. Resistance then emerges at the 61.8% Fibonacci retracement at $83,437 and the horizontal barrier near $84,410. 

A daily close above this level would strengthen the case for a renewed push toward the January highs of $97,924.