Bitwise Says Bitcoin Remains Poised for Growth Despite Drop From $80K, Sees Debt Crisis as Catalyst

Bitwise recently published a report examining Bitcoin’s performance in May. 

The report noted that Bitcoin climbed above $80,000 during the month but struggled to maintain that level. After encountering strong resistance between $80,000 and $85,000, Bitcoin fell back toward $72,000 as ETF outflows increased and investor sentiment weakened.

Despite the pullback, Bitwise said the overall outlook for Bitcoin remains positive. The firm believes several long-term trends continue to strengthen the asset’s investment case.

Key Points

• Bitcoin hit $83K in May but fell back to $72K after $1B ETP outflows hit sentiment.
• Price failed to break $80K–$85K resistance, which is the key bull-bear zone by Bitwise.
• Long-term holders now control 74% of supply, with record 14.85M BTC held inactive.
• Bitwise says rising global debt risks and liquidity could become Bitcoin’s next big catalyst.

Bitcoin Rally Loses Momentum Above $80K

According to Bitwise, Bitcoin’s move above $80,000 was fueled by a short squeeze and improving on-chain data. The cryptocurrency briefly approached $83,000 and, at one point, outperformed U.S. stocks and gold.

The rally was supported by about $166.5 million in net inflows into Bitcoin ETPs. Long-term holders also accumulated roughly 125,000 BTC during the previous month.

However, the momentum faded later in May. Global Bitcoin ETPs recorded more than $1 billion in net outflows, leading to a sharp drop in sentiment.

After failing to break through the $80,000-$85,000 range, Bitcoin fell back to around $72,000. Bitwise described this area as the market’s key dividing line between bullish and bearish conditions.

Long-Term Holders Continue Accumulating

While demand has slowed, Bitwise highlighted a growing supply trend that could support Bitcoin over time. The amount of Bitcoin held by long-term investors reached a record 14.85 million BTC, equal to about 74.3% of the circulating supply.

The report said more coins are moving into the hands of investors who are unwilling to sell, even during periods of market volatility. Bitwise cited the following data:

• 60.5% of Bitcoin supply has not moved in more than one year.
• 48.5% has remained untouched for over two years.
• 42.9% has not moved for more than three years.
• 33% has stayed inactive for at least five years.

According to the firm, this growing trend of holding Bitcoin is tightening supply, even as demand remains relatively weak.

Sovereign Debt Problems to Benefit Bitcoin

A major theme in the report was rising pressure in global government bond markets.

Bitwise pointed to higher Japanese government bond yields, an estimated $29 trillion in global debt that must be refinanced in 2026, and warnings from the IMF that investors may become less willing to fund growing government debt.

The firm argued that worsening debt conditions could eventually support Bitcoin. If central banks respond with additional liquidity measures, Bitcoin could benefit.

Bitwise also described Bitcoin as a potential hedge against sovereign debt risks because it operates independently of governments and does not rely on a central issuer.

The report noted that Bitcoin has historically performed well when real interest rates decline. If inflation remains elevated while the Federal Reserve pauses rate hikes, real yields could fall and create a more favorable environment for Bitcoin.

Bitcoin Still Looks Cheap Compared to Big Tech

Despite recent volatility, Bitwise believes Bitcoin remains reasonably valued compared to major U.S. technology stocks.

The firm’s analysis showed Bitcoin’s market-value-to-realized-value (MVRV) ratio remains below its long-term average. Only 36% of historical readings have been lower. Meanwhile, the Nasdaq 100’s price-to-book ratio is near record highs.

Bitwise said this valuation gap could make Bitcoin more attractive if investors begin shifting money away from expensive technology stocks and into scarce assets such as Bitcoin.

Key Price Levels to Watch

Bitwise said several indicators continue to point to the $78,000-$80,000 range as Bitcoin’s most important price zone. The report highlighted:

• $78,000-$80,000 as the main bull-bear battleground.
• $83,000-$85,000 as the first major resistance area.
• $95,000 as the next major upside target.
• $73,000 as a critical support level.

According to the firm, regaining the $78,000-$85,000 range could improve investor confidence and bring fresh capital back into the market.

Ultimately, Bitwise believes Bitcoin is currently in a delicate balance. Demand has weakened across spot, ETF, derivatives, and on-chain markets, while supply continues to tighten as more investors move coins into long-term storage.

Although macroeconomic pressures could weigh on prices in the short term, the firm argues that record levels of long-term holding, relatively low valuations, and growing sovereign debt concerns could help set the stage for Bitcoin’s next major rally.