Trading Moment: Inflation looms over risk assets; Bitcoin experiences volatile trading, testing support at $74,000.

Daily market data review and trend analysis, produced by PANews.

Macro Market

All three major U.S. stock indexes closed lower: the Dow Jones Industrial Average fell 0.65% to 49,363.88 points; the S&P 500 fell 0.67% to 7,353.61 points; and the Nasdaq Composite fell 0.84% to 25,870.71 points. The S&P 500 and Nasdaq recorded their third consecutive day of decline. April's CPI unexpectedly rebounded to 3.8% year-on-year, and real wages experienced negative growth for the first time in three years. Coupled with the energy supply disruption caused by the geopolitical conflict between Trump and Iran, this completely shattered market expectations for interest rate cuts. The probability of a 25 basis point rate hike by the Federal Reserve in December has risen to 41.7%, while the probability of a rate hike in 2026 has surged to over 80%.

Long-term US and Japanese bonds are experiencing an epic sell-off . The yield on the 30-year US Treasury note broke through 5.20% intraday, reaching its highest level since the eve of the 2007 financial crisis, while the 10-year yield rose to 4.68%. The Japanese bond market is also under pressure, with the 10-year JGB yield hitting its highest level since the late 1990s. Morgan Stanley's Japan CEO warned that if the Bank of Japan fails to raise interest rates in June, the yen exchange rate could face sharp fluctuations, falling to 170 or rising to 140, potentially impacting both the bond and currency markets.

Newly appointed Federal Reserve Chairman Kevin Warsh has been besieged by the market and his colleagues even before his official swearing-in. Facing rising yields, Subadra Rajappa of Societe Generale points out that this poses a challenge to Warsh's dovish stance. Former Fed economist Julia Coronado states that the war has exacerbated fiscal deterioration, and the only path to rate cuts is an economic recession. Trump's sudden change of heart, saying he will "set interest rates himself," is seen by analyst Derek Tang as the White House finding an excuse not to cut rates in June.

In Japan, the Nikkei 225 index fell for the fifth consecutive day, breaking below the 60,000-point mark. SoftBank Group's stock price once dropped by more than 8%, marking its biggest single-day decline since April 28. Meanwhile, the South Korean stock market also suffered a severe blow. Affected by the breakdown of 15-hour negotiations between Samsung and its union and the impending 18-day general strike scheduled to begin on Thursday, the KOSPI index plummeted by more than 3%, falling below 7,100 points. Analyst Eamonn Sheridan pointed out that the market is closely watching the situation at the affected production lines.

AI and the Stock Market

The faith in tech stocks is being tested, with giants locked in a fierce battle between overbought technicals and strong fundamentals. Market funds are withdrawing from overcrowded trades, with only one-fifth of S&P 500 stocks outperforming the overall index. Nvidia's earnings report, due after the market closes on May 21, is seen as both a source of hope and the biggest eye of the storm.

The options market exhibited an unusually high implied volatility of 6%, prompting Goldman Sachs analyst Peter Callahan to warn that the technical indicators have issued the most extreme warning since 1999. Despite this, Goldman Sachs maintained its buy rating on Nvidia, setting a 12-month price target of $250. While Goldman Sachs is optimistic about Nvidia's performance, analysts cautioned that market expectations are already high, and simply exceeding earnings expectations may not significantly drive the stock price up. Key downside risks include slowing spending on AI infrastructure, increased competition, and supply chain issues. Meanwhile, SpotGamma data shows that while traders are chasing the rally, they are also purchasing deep out-of-the-money put options for tail hedging to mitigate potential risks.

Despite Google's unveiling of the lighter and cheaper Gemini 3.5 Flash and the all-weather AI agents Gemini Spark and Omni models at its I/O conference to compete with OpenAI, Google's stock price still closed down more than 2% . Meanwhile, Silicon Valley chipmaker Marvell rose more than 4%, while storage giants SanDisk and Micron rose nearly 4% and 2.5%, respectively. In addition, Bakkt's stock price surged 19% in a single day after executive Michael Alfred made a $4.85 million internal purchase and shifted its focus to stablecoin infrastructure.

Bitcoin price

Bitcoin fell for five consecutive days after failing to break through the 200 EMA, nearly dropping below $76,000. Soaring US Treasury yields and a strong dollar put significant pressure on risk assets, causing the US spot Bitcoin ETF to lose nearly $1 billion in just two trading days. Although there was a gap left at $79,122 on the CME and strong buying around $76,000, the crypto market remains shrouded in a wait-and-see sentiment in the short term.

Bearish view

Core logic: The strengthening of the US dollar and the surge in Treasury yields have drained liquidity from risky assets, resulting in heavy selling pressure above and technical indicators suggesting a deeper correction.

Killa: Bitcoin may test $77,400 in the short term, then rise further to $78,500, after which the market will focus on the CME gap. If the price is accepted back to the current range, it may fall further to the $74,000 area. Bitcoin prices may experience frequent fluctuations and shakeouts in the next 2-3 months.
LP: The US Dollar Index (DXY) is heading towards the 100 mark. A strong dollar is bound to bring a weak Bitcoin. If the cycle repeats itself, Bitcoin will fall to the $50,000 range.
Max Trades: The order book shows significant selling pressure in the 80k-84k range, while buying support is relatively weak, making it highly likely that the price will sweep down to the 75k range.
Cheds Trading: The daily chart may be forming a flat bottom at the lower Bollinger Band, and it is expected to rebound to 78.5k before turning downwards again.
Mizer: The most likely scenario right now is either a rebound to 79k to lure in more buyers, or a direct plunge to 72k, but the ultimate path is to continue falling to just over 60,000 US dollars.
CrypNuevo: A price pullback to the 71k liquidity pool is highly probable, and a retest and rejection at 79k is also possible.
CryptoJack: There is a gap at $79,122 on the CME, but the price may first drop to $75,000.

bullish view

Core logic: The current pessimistic sentiment is deceptive; major funds are actively accumulating at key support levels, and expectations of macro-level monetary easing will ultimately push up the price of the coin.

K33 Research: This bear market is different from previous ones. The derivatives market is showing unusual pessimism (funding rates have been negative for 81 consecutive days), and traders are extremely defensive. The $60,000 level in February is likely to be the largest drawdown in this cycle.
Murphy: The chip distribution shows that the funds that entered at 78,000 did not panic and flee, and funds that entered at 76,000 have already intercepted. The reasonable pullback range is between $78,000 and $66,000. A second pullback will make the structure more resilient.
Altcoin Sherpa: 60k is the bottom. Currently, it's just fluctuating in this area. Once the closing price breaks through the recent high, Bitcoin will head straight for $100,000.
Ali Charts: Based on the MVRV pricing band, as long as Bitcoin holds above $72,960, there is a chance it could rebound to $94,850.
CryptoCache: Binance whales remain bullish, placing a massive limit buy order worth approximately $74 million at $76,740.
mooncake: The buy orders at 76.3k have remained strong for nearly 10 hours despite the negative CVD, indicating that any short-term dips will be actively absorbed by the buyers.

Key data (as of 14:00 HKT, May 20)

(Data source: Coinank, Upbit, SoSoValue, CryptoBubbles)

Bitcoin ETF: -$331 million, marking the third consecutive day of net outflows.
Ethereum ETF: -$86.3066 million, marking the sixth consecutive day of net outflows.
SOL ETF: +$3.7829 million
XRP ETF: +$1,476,500
HYPE ETF: +$11.043 million
Fear of Greed Index: 27 (Fear)
Upbit 24-hour trading volume rankings: XRP, BTC, ETH, TRAC, ONDO
Sector Performance: The crypto market generally declined, with only the DeFi and SocialFi sectors showing relative resilience.

24-hour liquidation data: A total of 64,543 people worldwide were liquidated, with a total liquidation amount of $136 million, including $28.16 million in BTC liquidations, $22.71 million in ETH liquidations, and $4.48 million in XRP liquidations.

Today's Outlook

Meta plans to lay off 20% of its workforce on May 20 and reassign 7,000 employees to AI positions.
Coinbase will suspend trading of 12 perpetual contracts on May 21.
KAITO (KAITO) unlocked approximately 17.6 million tokens, worth approximately $7.9 million.
LayerZero (ZRO) unlocks 25.72 million tokens, worth approximately $37.02 million.
Nvidia will release its first-quarter earnings report at 4:20 AM on May 21.
The Federal Reserve releases the minutes of its monetary policy meeting (May 21, 02:00).
US initial jobless claims for the week ending May 16 (in thousands): Expected 21,000, previous 211,000 (May 21, 20:30)

The top 100 cryptocurrencies by market capitalization with the largest gains today are: Venice Token (up 17.70%), XDC Network (up 15.70%), Siren (up 4.20%), Zcash (up 3.20%), and Algorand (up 3.10%).