Bitcoin’s sharp decline below the $80,000 level was not simply a random market move. Analysts say the drop was caused by a combination of weakening on chain activity, growing bearish pressure in derivatives markets, and macroeconomic concerns tied to inflation data.
After briefly climbing above $82,000 earlier in the week, Bitcoin quickly reversed course and plunged below $79,000 before recovering slightly near the $80,000 mark.
Warning Signs Appeared Before the Selloff
According to on chain analyst Easy On Chain, signs of weakness had already started emerging before Bitcoin’s price correction began.
Data from May 11 showed that Bitcoin exchange outflows had dropped sharply to just 19,995 BTC. This was significantly below the early May range of 28,000 to 35,000 BTC and also far lower than the daily average of roughly 25,600 BTC during that period.
Lower exchange outflows typically suggest that fewer investors are withdrawing Bitcoin from trading platforms, meaning more coins remain available for selling pressure. Easy On Chain described this as a positive netflow situation, which reduced the market’s ability to absorb heavy selling activity.
At the same time, the derivatives market was increasingly leaning bearish. Between May 8 and May 10, open interest rose above average levels while funding rates turned negative and continued weakening.
This indicated that traders were aggressively opening short positions and betting on a price decline. As selling intensified, heavily leveraged long traders were caught off guard, leading to a wave of liquidations.
Easy On Chain revealed that long liquidations on May 12 were nearly 12 times larger than short liquidations. Over a three day period between May 11 and May 13, approximately $109.7 million worth of leveraged long positions were wiped out, becoming a major force behind the market crash.
Inflation Data and Whale Selling Added Pressure
Another factor that intensified the decline was the release of US CPI and PPI inflation data, which increased concerns about broader economic conditions and triggered additional market uncertainty.
Analyst Carmelo Aleman also pointed to significant whale activity during the downturn. According to his findings, wallets holding between 1,000 and 10,000 BTC sold around 7,650 BTC during the correction, equivalent to nearly $616 million based on average prices near $80,500.
During that same period, Bitcoin’s price dropped from roughly $81,000 to below $79,000 while open interest increased by almost $590 million. This suggested that new leveraged positions continued entering the market even as prices declined.
Bitcoin Still Faces Resistance Near $82K
At the time of writing, Bitcoin remained slightly below the $80,000 level after losing around 2% over the past 24 hours and recording a similar decline across the last seven days.
Despite the recent weakness, Bitcoin is still up nearly 7% over the past month. However, the asset remains down more than 23% compared to the previous year and continues trading over 36% below its October 2025 all time high near $126,000.
Easy On Chain believes traders should closely monitor two major indicators moving forward. The first is whether exchange netflows return to negative territory, which would suggest investors are once again withdrawing Bitcoin from exchanges. The second is whether liquidation pressure from leveraged long positions begins to ease.
Until those conditions improve, analysts warn that Bitcoin may continue struggling to reclaim the $82,000 resistance zone.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
