BlockBeats News, May 19th. Wintermute released a market commentary stating that the crypto market came under significant pressure this week as U.S. inflation reignited and rate expectations reversed. Bitcoin failed to break above the 200-day moving average during its first major macro shock, indicating that the previous uptrend was driven more by short-covering rather than sustained inflows of new capital. The market environment has clearly shifted, with the U.S. CPI accelerating, core inflation exceeding expectations, real wages turning negative, the U.S. 10-year Treasury yield rising to 4.58%, and a more hawkish Fed chair set to take office in three weeks.

The market's pricing of the Fed's policy path has also rapidly changed. In just five trading days, sentiment shifted from expecting rate cuts to worrying about a potential rate hike. Cross-asset performance has similarly reflected this change: Brent crude oil rose by 8.6% this week, while Bitcoin and Ethereum fell by 5.7% and 10.2%, respectively. Capital has flowed into inflationary assets, and during the downturn, cryptocurrencies have shown even weaker performance than the stock market, a relative weakness that is seen as concerning.

Despite the continued presence of long-term structural positives, such as exchange Bitcoin reserves remaining at multi-year lows, hodlers continuing to accumulate, and the progress of the U.S. crypto regulatory bill "CLARITY," institutional funds currently seem more inclined to take profits on rebounds in the short term rather than to continue adding to their positions. The market is currently focusing on the $76,000 to $78,000 range for Bitcoin. If it can hold this level after Nvidia's earnings report on Wednesday, market confidence may recover. However, if it drops below $75,000, with funding rates falling and ETF outflows persisting, the price could quickly test the $70,000 range.