Bitcoin closed May near $70,600 after losing roughly 8% to 10% during a month dominated by rising inflation, higher Treasury yields, and escalating geopolitical uncertainty, according to a market report from Finestel.
According to Finestel’s May market report shared with crypto.news, Bitcoin (BTC) entered the month with strong momentum and briefly climbed to nearly $82,839 after breaking above the $79,500 resistance area.
Conditions changed after April inflation data came in above expectations, prompting investors to reassess expectations for interest rate cuts and reduce exposure to risk assets.
Data cited by Finestel showed April CPI reached 3.8% while PPI rose to 6.0%, both exceeding forecasts. The report said minutes from the Federal Open Market Committee revealed a hawkish stance among policymakers, while expectations for rate cuts were pushed further out under Federal Reserve Chair Kevin Warsh.
At the same time, fluctuating developments surrounding U.S.-Iran negotiations added another layer of uncertainty. Finestel noted that Treasury yields climbed sharply, with the 10-year yield reaching 4.66% and the 30-year yield moving above 5.18%, contributing to a wave of de-risking across financial markets.
By the end of May, Bitcoin had fallen to around $70,600 from a peak above $82,800, while the total cryptocurrency market capitalization declined from approximately $3.05 trillion to $2.45 trillion, according to the report. Ethereum posted steeper losses, falling 12% to 15% during the same period.
Bitcoin faces pressure below key cost basis
One of the most important developments highlighted by Finestel was Bitcoin’s move below the short-term holder cost basis.
After failing to maintain momentum between $81,000 and $85,000, Bitcoin dropped beneath the $78,200 to $78,300 area and slipped below the broader market cost basis of roughly $78,277, according to the report. Finestel said this created a large group of investors holding positions at a loss, increasing the likelihood of selling pressure if prices recover toward the $75,000 to $78,000 range.
Support has now formed between $70,000 and $73,000, which Finestel identified as a key zone for market participants to monitor in June.
The report’s on-chain analysis suggested that short-term holders accounted for much of the recent selling activity, while long-term holders largely retained their positions. Spot cumulative volume delta data also showed buying interest emerging during declines into the $70,000 to $77,000 area.
Elsewhere, Bitcoin dominance climbed above 61% from about 58% at the beginning of May, indicating that capital increasingly concentrated in Bitcoin while investors reduced exposure to higher-risk assets.
Conditions deteriorated further in early June. As previously reported by crypto.news, Bitcoin dropped below $63,000 amid renewed U.S.-Iran tensions and more than $1.6 billion in crypto liquidations over a 24-hour period. Several market analysts have identified the $55,000 to $50,000 region as a potential downside area if selling pressure continues.
Asset managers raise cash and reduce risk
Despite the market decline, Finestel’s AUM-weighted tracking of professional asset managers showed a measured response rather than widespread liquidation.
By the end of May, allocations to Bitcoin and Ethereum rose modestly to 55.5% from 54.5%, according to the report. Stablecoin holdings increased more noticeably, climbing from 23% to 27% as managers raised liquidity reserves.
Exposure to yield-generating DeFi and real-world asset strategies fell from 13.5% to 12%, while allocations to high-conviction altcoins dropped from 9% to 5.5%, the report showed. Leverage also declined as firms moved toward more conservative positioning.
The report said many managers started reducing risk around the middle of May, using periods of strength to increase cash positions while maintaining core Bitcoin and Ethereum exposure.
Looking ahead, the firm recommended keeping 55% to 57% of portfolios in Bitcoin and Ethereum, holding 26% to 28% in stablecoins, allocating 12% to 13% to yield-focused DeFi and real-world asset opportunities, and limiting high-conviction altcoin exposure to between 5% and 7%.
According to Finestel, a sustained recovery would likely require Bitcoin to reclaim the $78,000 level alongside an improvement in macroeconomic conditions.
Until then, the report said maintaining liquidity and preserving capital remain the preferred approach as markets continue to react to inflation data, interest rate expectations, and geopolitical developments.
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