Bitcoin Erases 5-Month Gains in 48 Hours Amid ETF Outflows and PPI Shock

Author: Claude, Shenchao TechFlow

DeepInsight Summary: On Monday, Bitcoin fell below $77,000, retreating to its opening level on May 1, erasing all gains of the past half-month within just 48 hours. Multiple triggering factors converged: U.S. April PPI surged 6% year-over-year, hitting a three-year high; Bitcoin spot ETFs recorded net outflows exceeding $1 billion for the week, ending six consecutive weeks of inflows; and $657 million in crypto positions were liquidated within 24 hours. Amid retail investor panic and mass exits, Strategy invested $2 billion to add nearly 25,000 BTC, while Goldman Sachs fully exited its XRP and Solana ETF holdings in Q1 and reduced its Ethereum exposure by 70%, retaining only $700 million in Bitcoin ETFs. Institutional choices are becoming increasingly clear: either avoid crypto entirely, or focus exclusively on Bitcoin.

Bitcoin dropped as low as $76,551 during early Asian trading on Monday, the lowest level since May 1. According to Bloomberg on May 18, widespread risk-off sentiment triggered by the situation in the Middle East prompted traders to significantly reduce their positions, leading to nearly $500 million in liquidations across the crypto market within 15 minutes.

What does this price movement mean? On May 1, Bitcoin opened at approximately $76,306. Within the following two weeks, it rose above $82,000 before declining for four consecutive trading days, erasing all of the month’s gains. For traders who bought in mid-month, their paper profits turned into paper losses within just 48 hours—so quickly that there was little time to react.

The trigger for this round of selling was the U.S. Producer Price Index (PPI) for April, released on May 13. According to data from the U.S. Bureau of Labor Statistics, the PPI rose 1.4% month-over-month, the largest monthly increase since March 2022, and surged 6% year-over-year—the highest level since December 2022—far exceeding the market expectation of 4.9%.

Energy prices are the main driver. In April, gasoline prices surged 15.6% month-over-month, and diesel prices rose 12.6%. The impact of the war in Iran on the energy complex is now propagating down the supply chain. Even excluding food and energy, core PPI rose 1% month-over-month and reached 5.2% year-over-year, indicating that price pressures extend beyond the pump.

Chief Economist Carl Weinberg of High Frequency Economics warned after the PPI report that the data would trigger alarms at both the Federal Reserve and in financial markets. The CME FedWatch tool shows that market pricing for a 25-basis-point rate hike this year has risen to approximately 39%, with expectations for any rate cuts this year largely eliminated.

The day before the PPI data was released, April’s CPI rose year-over-year to 3.8%, the highest level since May 2023. According to CNN, several economists raised their forecasts for May’s CPI after the PPI data release, expecting it to exceed 4%. The pass-through of wholesale prices to consumer prices is accelerating.

Macro pressures quickly transmitted to institutional capital. According to SoSoValue data, for the week ending May 15, U.S. spot Bitcoin ETFs recorded approximately $1 billion in net outflows, ending six consecutive weeks of net inflows. A CoinShares report dated May 18 showed that digital asset investment products overall experienced net outflows of $1.07 billion, marking the third-largest weekly outflow since 2026.

James Butterfill, Head of Research at CoinShares, said this shift "may reflect geopolitical risk-off sentiment triggered by developments related to Iran."

The total net inflow over the previous six weeks amounted to approximately $3.4 billion, averaging about $568 million per week, with a single-month inflow of $1.97 billion in April—the strongest monthly performance since 2026. This accumulation was sharply reversed this week. On May 13, net outflows reached $635 million, the largest single-day decline of the week; on May 15, none of the 11 Bitcoin ETFs recorded positive inflows, resulting in an additional $290 million in outflows.

Spot Ethereum ETFs also experienced five consecutive days of outflows, with a net outflow of $255 million for the week. As of the end of the week, cumulative net inflows into Bitcoin ETFs still reached $58.34 billion, with total assets under management approximately $104.29 billion.

At the same time as ETF funds flowed out, the derivatives market underwent a severe long liquidation. According to Coinglass data, the total crypto market liquidations over 24 hours reached $657 million, with long positions accounting for approximately 89%. According to Bitcoin.com, $584 million of those liquidations came from long positions, and the Fear & Greed Index plummeted from a neutral 50 just days ago to 29, entering the fear zone.

The chain reaction of leveraged liquidations accelerated the decline. After Bitcoin broke below key support, it triggered a wave of stop-losses and liquidations, creating a spiral of "liquidation → selling → further liquidation." LMAX Crypto Strategist Joel Kruger described this process as forced liquidations and position unwinding pushing Bitcoin below critical technical support.

Bitcoin is currently trading in the range of $76,000 to $76,800, with the 50-day moving average at approximately $76,716 acting as short-term support and the 200-day moving average at approximately $83,513 serving as resistance above.

Amid retail liquidations and ETF outflows, Strategy (formerly MicroStrategy) executed counter-cyclical operations during the same period.

According to the Form 8-K filed with the SEC on May 18 by Strategy, the company purchased 24,869 bitcoins between May 11 and 17 at an average price of $80,985, for a total cost of approximately $2.01 billion. This transaction brings Strategy’s total Bitcoin holdings to 843,738 BTC, with a total cost of approximately $63.87 billion and an average purchase price of about $75,700. The purchase was primarily funded through the sale of STRC preferred shares.

Strategy also disclosed that its year-to-date "BTC yield" (a metric measuring the growth of Bitcoin holdings relative to diluted share count) reached 12.6%.

This is not the first time Saylor has increased positions during market panic. Throughout 2026, the strategy maintained a purchasing rhythm of nearly weekly or biweekly acquisitions, regardless of market conditions. From January to May, the company increased its BTC holdings from approximately 560,000 to over 840,000, averaging nearly 60,000 additional BTC per month. In the same week that everyone was focused on PPI data and ETF outflows, he spent another $2 billion on purchases.

If Strategy's actions represent the stance of "Bitcoin maximalists," Goldman Sachs' Q1 13F filing presents a more representative institutional choice.

According to Goldman Sachs' latest Q1 2026 13F filing, the bank fully liquidated all its XRP and Solana ETF holdings during the first quarter. At the end of the previous quarter, Goldman Sachs held approximately $154 million in XRP-related ETFs (spread across issuers such as Bitwise, Franklin Templeton, Grayscale, and 21Shares) and over $100 million in Solana-related ETFs. Both positions are now zero.

Ethereum ETF exposure has been reduced by approximately 70%, falling to around $114 million from previous levels. Bitcoin ETF positions have remained largely stable, hovering between $700 million and $720 million, with only a minor reduction of about 10%.

Meanwhile, Goldman Sachs increased its positions in crypto infrastructure stocks: Circle up 249%, Galaxy Digital up 205%, and Coinbase also saw an increase. The signal from these moves is clear: Goldman Sachs is not exiting crypto, but rather narrowing its bets—shifting from a broad approach back to a BTC-only focus.

According to CCN, Harvard’s endowment also reduced its Bitcoin ETF holdings by 43% during the same period and fully exited its Ethereum ETF positions. Institutions are simultaneously consolidating their crypto exposure into fewer assets.