Bitcoin retraced from $83,000 to $72,000 in May 2026 following $1.031 billion in Bitcoin exchange-traded product outflows during the second half of the month, according to a report from Bitwise Europe researchers André Dragosch and Luke Deans. The month opened with Bitcoin crossing $80,000 for the first time since late January, driven by short position liquidations totaling approximately $42 million within 24 hours. Long-term Bitcoin holders reached an all-time high of 14.85 million BTC, equal to 74.3% of circulating supply, per Bitwise Europe data. The price volatility occurred against a backdrop of rising sovereign debt stress, with governments and companies set to borrow $29 trillion from bond markets in 2026, 17% more than in 2024 and double the amount from a decade ago, according to the report.
Bitcoin Crosses $80,000 Then Retraces to $72,000 in May 2026
The month opened with Bitcoin crossing $80,000 for the first time since late January. According to Bitwise Europe researchers André Dragosch and Luke Deans, perpetual funding rates had been negative on 21 of 30 days in April, signaling crowded short positioning. When those positions unwound, approximately $42 million in short futures liquidations cleared within 24 hours.
Global Bitcoin ETPs recorded net inflows of $166.5 million in the first half of the month. Net realized profit and loss flipped positive for the first time since late January. The sell-side risk ratio fell to its lowest reading since October 2023, and long-term holders added approximately 125,000 BTC over the period, per the Bitwise Europe report.
Sentiment peaked mid-month. The firm's Cryptoasset Sentiment Index reached its highest reading in 12 months, with 13 of 15 sub-indicators above their short-term trend. Bitcoin also briefly touched $83,000 on reports of possible progress toward a U.S.-Iran de-escalation agreement.
The second half reversed the trend entirely. Global Bitcoin ETPs recorded net outflows of $1.031 billion. The Crypto Fear and Greed Index re-entered fear territory. Bitcoin was rejected at the 200-day moving average near $82,000 and retraced toward $72,000 to close the month.
Governments Set to Borrow $29 Trillion from Bond Markets in 2026
Bitwise Europe's report identifies a divided macro environment. Global equities continued making new all-time highs, supported by strong corporate earnings and positive growth revisions. Sovereign bond markets are under rising stress.
Governments and companies are set to borrow $29 trillion from bond markets in 2026, 17% more than in 2024 and double the amount from a decade ago, per the report. The IMF has warned that markets are becoming less forgiving of sovereign borrowing assumptions. Japanese 10-year bond yields reached multi-decade highs during the month, a development Bitwise Europe flags as particularly significant given Japan's approximately $7.5 trillion sovereign bond market and its status as the largest foreign holder of U.S. Treasuries.
The report from Dragosch and Deans notes that Strategy's STRC perpetual preferred equity has been trading below par. Bitwise Europe estimates Strategy accounted for approximately two-thirds of institutional Bitcoin demand through treasury companies and ETPs in 2026 so far.
Kevin Warsh was sworn in as Federal Reserve chair on May 22, succeeding Jerome Powell for a four-year term. Bitwise Europe's natural language analysis of Warsh's recent Senate Banking Committee speech characterizes his tone as slightly more hawkish than Powell's. The firm notes that if the Fed holds rates steady while inflation rises, declining real yields could recreate a historically favorable macro backdrop for Bitcoin.
Long-Term Bitcoin Holders Reach 14.85 Million BTC All-Time High
Onchain activity across spot, derivatives, options, and exchange-traded fund venues sat near yearly lows throughout May, according to Bitwise Europe. The firm notes that only 3.3% of trading days on record have seen lower combined realized profit and loss throughput, indicating broad investor disengagement.
Long-term holder supply reached an all-time high of approximately 14.85 million BTC, or about 74.3% of circulating supply, per the report. That supply is growing at 10.3 times the rate of monthly new issuance. Across aging cohorts, 60.5% of all Bitcoin has not moved in over one year, 48.5% in over two years, 42.9% in over three years, and 33.0% in over five years, with all four cohorts trending higher.
Bitwise Europe identifies the $78,000 to $85,000 range as the market's current midpoint of control, where the True Market Mean, the short-term holder cost basis, and the U.S. spot Bitcoin ETF aggregate cost basis all converge. The 200-day moving average sits at $80,500 within that band.
Bitcoin Market-Value-to-Realized-Value Ratio Sits Below 64% of Historical Observations
Bitcoin's market-value-to-realized-value ratio currently sits below 64% of its historical observations, per Bitwise Europe, placing it in the lower half of its long-term distribution. The Nasdaq 100's price-to-book ratio, by contrast, sits near its highest level on record, with approximately 99% of historical readings below the current level.
The report also references a theoretical model first proposed by Greg Foss in 2021, which estimates Bitcoin's illustrative fair value as a sovereign default hedge at approximately $224,000 today, based on weighted default probabilities across G20 sovereign bond markets. Bitwise Europe presents this as a model-implied figure, not a price target.
FAQ
What caused Bitcoin to retrace from $83,000 to $72,000 in May 2026?
Bitcoin retraced from $83,000 to $72,000 in May 2026 following $1.031 billion in Bitcoin exchange-traded product outflows during the second half of the month, according to Bitwise Europe. Bitcoin was rejected at the 200-day moving average near $82,000, and the Crypto Fear and Greed Index re-entered fear territory during this period.
How much Bitcoin do long-term holders currently control?
Long-term holder supply reached an all-time high of approximately 14.85 million BTC, or about 74.3% of circulating supply, per the Bitwise Europe report. That supply is growing at 10.3 times the rate of monthly new issuance. Across aging cohorts, 60.5% of all Bitcoin has not moved in over one year.
What is Bitwise's theoretical fair value model for Bitcoin?
The report references a theoretical model first proposed by Greg Foss in 2021, which estimates Bitcoin's illustrative fair value as a sovereign default hedge at approximately $224,000 today, based on weighted default probabilities across G20 sovereign bond markets. Bitwise Europe presents this as a model-implied figure, not a price target.
