The cryptocurrency market has run into a major wave of turbulence. On May 18, the price of the pioneer cryptocurrency collapsed to $76,580, hitting a local low since the beginning of the month. Bitcoin’s sharp dive traditionally dragged the altcoin sector down with it, and market sentiment instantly shifted into depressive territory—the Fear and Greed Index fell into the “Fear” zone, scoring 27 points.
Macroeconomic Storm: The Reasons Behind the Crash
Analysts are unanimous: the current drawdown is a “macroeconomic story” triggered by external factors. The main catalysts were a strengthening US dollar, rising government bond yields, and a sharp escalation of geopolitical tensions in the Middle East.
- The Trump Factor and Expensive Oil: Fuel was added to the fire by tough statements from US President Donald Trump, who threatened Iran with military action if peace talks drag on. Against this backdrop, the commodities market reacted with a sharp rally: Brent crude soared to $111, while WTI jumped to $107.7.
- Fed Fears: As BTSE Chief Operating Officer Jeff Mei notes, investors worry that expensive oil will trigger a new spiral of inflation. This could force the Federal Reserve (Fed) to take aggressive measures and hike interest rates once again.
- Flight from Crypto ETFs: Midst the uncertainty, institutional investors began reducing their risk exposure. For the week of May 13–17, $1 billion was withdrawn from spot crypto ETFs, snapping a successful six-week streak of inflows.
Expert Opinion: Presto Research analyst Min Jung confirms that big capital is locking in positions in risky assets ahead of fresh macro data. Nevertheless, the Bitrue Research Institute urges against panic, calling the current drop a “healthy correction” with a key support level at $74,000.
$600 Million in Liquidations and Bear Pressure
The abrupt price drop triggered a domino effect across the futures market. At the start of the Asian session, long positions worth nearly $500 million were forcefully closed in just 15 minutes. The total liquidation volume for bulls ultimately exceeded $606 million.
Rachel Lucas of BTC Markets emphasized that the stock market decline and a broader flight from risk naturally hit crypto. The situation was exacerbated by a cascading trigger of stop-losses set by traders last week. Concurrently, Deribit exchange saw a sharp spike in demand for put options with a strike price of $77,500, signaling that large players are actively hedging their risks.
Where Are the “Hamsters” Disappearing? Retail Interest at Rock Bottom
While major players maneuver their capital, the presence of small-scale investors (wallets holding less than 1 BTC) in the market has shrunk to historic lows. According to on-chain analyst under the pseudonym Darkfost, the average monthly inflow of Bitcoins from retail users to the Binance exchange has dropped to a modest 314 BTC.
To understand the scale of this “lull,” the analyst provided historical comparison data:
| Period / Market Phase | Average Monthly Retail Inflow to Binance |
| Historical Peak (2018) | 5,400 BTC |
| Bull Market (2021) | 2,600 BTC |
| Bear Phase of Current Cycle | 1,800 BTC |
| Peak of Current Cycle (March 2024) | 1,200 BTC |
| Current Figure (May 2026) | 314 BTC |
Over the past two years, retail activity has dropped more than threefold. Darkfost states that smaller investors are gradually vanishing from on-chain metrics. However, this does not spell death for the industry, but rather points to its transformation: some retail traders have left the market entirely, while another portion has switched to buying shares of spot Bitcoin ETFs instead of direct asset ownership.
Whales Accumulating Strength
A completely different picture is unfolding among large-scale investors. Long-term holders (LTH), by contrast, are using the dip for distribution and accumulation. They currently control 15.26 million BTC, matching the levels seen in August 2024.
Over the past 30 days alone, LTH balances grew by 316,000 BTC. The situation has done a complete 180-degree turn compared to November last year, when long-term investors were actively taking profits, resulting in a net outflow of 650,000 BTC. Today, hodlers who bought coins about six months ago are in no hurry to part with their assets.
What to expect next? According to Darkfost’s forecasts, the supply held by long-term holders is expected to spike by another 800,000 BTC around May 23. These are coins previously moved by Coinbase exchange that will officially cross the six-month holding threshold, entering the long-term custody category. This could introduce additional supply scarcity to the market, supporting Bitcoin’s price in the medium term.
