Bitcoin slid below $78,000, marking its lowest level in May.

Cointelegraph reported on May 16 that bitcoin at one point hit $77,614, giving back most of its May gains.

The decline extended a move that erased most of the May rise. Markets reflected concerns surrounding U.S. Treasuries and a U.S.-Iran war issue at the same time. In particular, uncertainty over global oil supplies grew as Iran moved to introduce a passage regime for transits through the Strait of Hormuz and to exclude U.S.-related navigation. West Texas Intermediate crude futures ended weekly trade above $100 a barrel.

A macro environment weighing on risky assets also resurfaced. Mosaic Asset Co said in a recent analysis that geopolitical risks and macro uncertainty were creating an unfavorable backdrop for risky assets. It also said the possibility of inflation re-accelerating could unfold in a pattern similar to the mid-2022 surge in prices, adding to broader market caution.

Within the bitcoin market, views were split on whether downward pressure would persist below $80,000. Trader Cryptic Trades noted that prices edged lower over the past few days, but open interest rose and funding rates turned negative.

He said, "Bears are betting more strongly on further declines now," and added that they were moving into short selling as if a breakdown had already appeared even though the market structure was still intact. He added that such a flow is typically seen when a "bear trap" is forming.

Others also left room for further losses. Eric Coleman said bitcoin slipped again in a retest zone after breaking out of an ascending triangle, and suggested a short-term low target of around $75,000. He judged that prices could probe lower levels again after a shift from support to resistance is confirmed on charts.

Exchange order-book data also pointed to lower-level liquidity as a key watch point. Don Cryptic Trades singled out the $71,000 range as the nearest area of interest below the current price. He said, "The longer bitcoin stays around $80,000, the more liquidity will build above and below," and added, "At some point, a bigger and more aggressive move could come."

Market reaction is not coalescing clearly in one direction. As geopolitical variables and inflation concerns stir risk-off sentiment, derivatives indicators show an expansion of bearish bets. At the same time, some traders see heavy short positioning as something that could fuel a rebound.

In the near term, attention is on whether bitcoin can regain $80,000, with $75,000 and $71,000 seen as key support candidates. If oil prices and geopolitical risks continue to shake markets, bitcoin volatility could rise further. Conversely, if short positions build excessively, scope remains for a short-term rebound.

$BTC There's some liquidity clusters right above and below price, primarily the $78K area is an area that's worth watching. Besides that, zooming out further we got the ~$92K & ~$98K levels above and the ~$71K & ~$65K levels below. The longer price compresses around this $80K… pic.twitter.com/eOjP2zHsgP