Author: Claude, Deep Tide TechFlow

Deep Tide Introduction: Bitcoin dropped below $77,000 on Monday, returning to the opening level on May 1, with the 48-hour gains from the past half-month evaporating. Various triggering factors overlapped: the U.S. April PPI surged 6% year-on-year to a three-year high, Bitcoin spot ETF saw a net outflow of over $1 billion in a week ending six weeks of consecutive inflows, and the crypto market experienced liquidations of $657 million within 24 hours. While retail investors panic and flee, Strategy contrary to the trend invested $2 billion to increase holdings by nearly 25,000 BTC, while Goldman Sachs liquidated all of its XRP and Solana ETF positions in Q1, cutting its Ethereum exposure by 70%, retaining only $700 million in Bitcoin ETF. The choice of institutions is becoming clearer: either avoid crypto completely or only invest in Bitcoin.

On Monday, Bitcoin fell to $76,551 during the Asian early trade, the lowest level since May 1. According to a Bloomberg report on May 18, widespread risk aversion triggered by the Middle East situation prompted traders to significantly reduce their positions, with nearly $500 million liquidated in the crypto market within 15 minutes.

What does this price mean? On May 1, the opening price of Bitcoin was about $76,306. It rose above $82,000 within the following two weeks, then fell for four consecutive trading days, wiping out all the gains for the month. For those traders who chased the price up in the middle of the month, the transformation from profit to loss within 48 hours happened so fast that they barely had time to react.

PPI Year-on-Year Soars to 6% Creating a Three-Year High, Rate Hike Probability Rises to 39%

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

Energy prices were the main driver. In April, gasoline prices surged 15.6% month-on-month, diesel prices rose 12.6%, and the impact of the Iran conflict on the energy complex is cascading down the supply chain. Even excluding food and energy, core PPI still increased 1% month-on-month, reaching 5.2% year-on-year, indicating that price pressures are no longer confined to the pump.

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

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

ETF Inflows End After Six Weeks, Over $1 Billion Net Outflow in a Week

Macro pressures quickly transmitted to institutional funding levels. According to SoSoValue data, for the week ending May 15, the U.S. Bitcoin spot ETF recorded a net outflow of about $1 billion, ending six consecutive weeks of inflows. CoinShares' report on May 18 indicated that digital asset investment products experienced a total net outflow of $1.07 billion, marking the third-largest single-week outflow for 2026.

James Butterfill, Head of Research at CoinShares, stated that this shift "may reflect geopolitical risk aversion triggered by developments related to Iran."

In the previous six weeks, the total net inflow was about $3.4 billion, averaging about $568 million per week, with April's inflow reaching $1.97 billion, the strongest monthly performance for 2026. This accumulation was concentratedly reversed this week. On May 13, the single-day net outflow reached $635 million, the largest single-day drop for that week; on May 15, none of the 11 Bitcoin ETFs recorded positive capital flows, resulting in an additional outflow of $290 million.

The Ethereum spot ETF also faced five consecutive bearish days, with a total net outflow of $255 million for the week. As of the weekend, the cumulative net inflow for Bitcoin ETFs still reached $58.34 billion, with a total asset management scale of about $104.29 billion.

$657 Million Liquidation, 89% Being Longs

As ETF funds fled, the derivatives market experienced a brutal long position washout. According to Coinglass data, the total liquidations in the crypto market reached $657 million within 24 hours, with about 89% being longs. According to bitcoin.com, $584 million came from long positions, while the fear and greed index plunged from a neutral 50 days ago to 29, entering the fear zone.

The chain reaction of the leveraged liquidations accelerated the decline. Bitcoin triggered a large number of stop-loss and forced liquidation orders after breaking key support, creating a "liquidation → selling → further liquidation" spiral. LMAX crypto strategist Joel Kruger described this process as "forced liquidations and position washing" pushing Bitcoin below key technical support.

Bitcoin is currently hovering between $76,000 and $76,800, with the 50-day moving average around $76,716 providing short-term support, and the 200-day moving average around $83,513 acting as resistance above.

Strategy Goes Against the Trend with Additional 20,000 BTC, Saylor Not Looking at the Same Sentiment Report

While retail investors faced liquidations and ETFs bled funds, Strategy (formerly MicroStrategy) operated in the opposite direction during the same period.

According to Strategy's 8-K filing submitted to the SEC on May 18, the company purchased 24,869 BTC for approximately $2.01 billion between May 11 and 17, with an average price of $80,985. This transaction raised Strategy's total holdings to 843,738 BTC, with a total cost of about $63.87 billion, and an average price of about $75,700. This round of purchases was mainly funded by selling STRC preferred shares.

Strategy also disclosed that its "BTC yield" from the beginning of 2026 to date (an indicator measuring the growth of Bitcoin holdings relative to the number of diluted shares) reached 12.6%.

This is not the first time Saylor has increased holdings during market panic. Throughout 2026, Strategy has maintained a purchasing rhythm of almost every week or every two weeks, regardless of whether the market is up or down. From January to May, the company increased its holdings from about 560,000 BTC to over 840,000 BTC, averaging nearly 60,000 new BTC each month. In the same week where everyone was focused on the PPI data and ETF outflow data, he spent $2 billion buying.

Goldman Sachs Liquidated All XRP and Solana ETF in Q1, Only Retaining Bitcoin

If Strategy's actions represent the stance of "Bitcoin extremists," Goldman Sachs' Q1 13F holding report presents a more representative choice for institutions.

According to Goldman Sachs' latest Q1 2026 13F report, the bank completely liquidated all XRP and Solana ETF holdings in the first quarter. At the end of the previous quarter, Goldman Sachs held approximately $154 million in XRP-related ETFs (distributed among issuers such as Bitwise, Franklin Templeton, Grayscale, and 21Shares), as well as over $100 million in Solana-related ETFs. Now these two positions are zero.

The exposure to Ethereum ETFs was reduced by about 70%, from the previous level to about $114 million. The Bitcoin ETF position remained largely unchanged at around $700 million to $720 million, with only a slight reduction of about 10%.

At the same time, Goldman Sachs increased its holdings in crypto infrastructure stocks: Circle's stake increased by 249%, Galaxy Digital's increased by 205%, and Coinbase also saw an increase. The signal from this series of operations is clear: Goldman Sachs is not exiting crypto, but is narrowing its bets—from "broad spread" back to "BTC-only."

According to CCN, Harvard University's endowment fund also reduced its Bitcoin ETF holdings by 43% during the same period and completely exited the Ethereum ETF. Institutions are synchronously concentrating their exposure to crypto assets.