The drop follows a $37K rally and coincides with 30-year Treasury yields breaching 5% for the first time since 2009
Bitcoin is undergoing its first meaningful pullback since April, falling nearly 7% from a record high of $111,880 in May following a steep 50% rally.
According to Bitfinex’s latest report, the decline reflects not just technical fatigue, but growing macroeconomic pressure and overheating in derivatives markets.
The correction follows nearly 50 consecutive days of uninterrupted gains, taking Bitcoin from $74,501 to its all-time high with minimal retracements.
Bitfinex notes that the rapid ascent left little room for consolidation, and current conditions suggest a short-term reset rather than a structural breakdown.
Bitfinex points to profit-taking and derivatives overheating
Bitfinex analysts attribute the timing of the correction to aggressive profit-taking and a buildup of leveraged positions.
Options open interest surged to an all-time high of $49.4 billion—an increase of $25.8 billion in just a few weeks—before falling back to $39 billion following the May 29 options expiry.
This elevated positioning indicates traders were preparing for heightened volatility, with many hedging or speculating on directional swings.
At the same time, on-chain data shows the Relative Unrealised Profit indicator has breached its +2 standard deviation band, a level that has historically marked euphoric phases prone to intraday volatility and local market tops.
Bitfinex warns that, under such conditions, continued upward movement requires strong buy-side support to absorb increased selling pressure as gains are realised. Without it, price instability tends to follow.
Macro pressures re-emerge as Treasury yields spike
The market shift also reflects growing macroeconomic stress. A U.S. appellate court’s decision to uphold certain contested tariffs triggered a sharp reversal in long-term yields, with 30-year U.S. Treasury rates rising above 5%, a level last seen in 2009. This has revived concerns over tighter financial conditions.
In parallel, U.S. consumer spending slowed to just 0.2% growth in April, and business investment showed signs of weakness.
Orders for core capital goods fell 1.3%, while continuing jobless claims reached their highest level since 2021.
These data points paint a picture of a cooling economy amid persistent trade and policy uncertainty.
A reset, not a reversal, as institutional interest stays high
Despite the pullback, Bitfinex maintains that Bitcoin’s market structure remains strong. The current correction is described as a “healthy reset” after one of the sharpest rallies in crypto history, driven by leverage flushing and orderly profit-taking.
Institutional activity remains elevated, and the report emphasizes that ongoing participation from large players could help stabilize prices.
However, with derivatives markets still elevated and macro risks unresolved, short-term volatility is expected to persist.
