Bitcoin dropped below $78,000 on Tuesday, touching as low as $76,800 and triggering more than $657 million in liquidations across major exchanges. The slide comes as April's Consumer Price Index came in hotter than expected and the newly confirmed Federal Reserve Chair Kevin Warsh — a known hawk — prepares for his first FOMC meeting in June.
Inflation surprises, real wages turn negative
April's CPI printed at 3.8% year-over-year, above the 3.7% consensus. At the same time, US real wages turned negative for the first time in three years, squeezing consumer purchasing power. The 10-year Treasury yield jumped to 4.58%, its highest since September 2025, as markets repriced the likelihood of another rate hike.
Federal funds futures now imply a 44% probability of a hike by December, up from 22.5% just a week ago. That shift accelerated after Kevin Warsh was confirmed as Fed Chair — a pick widely seen as more hawkish than his predecessor. The next FOMC meeting is set for June 16-17.
Bitcoin's technical rejection and ETF bleeding
Wintermute noted that Bitcoin has been rejected near its 200-day moving average around $82,000 five times this month alone. The failure to hold that level opened the door to a test of the $76,000 support zone, with some analysts warning a break below could send the price toward $70,000.
Spot Bitcoin ETFs recorded $1 billion in net outflows last week — their worst weekly performance since January. Glassnode's seven-day simple moving average of net ETF flows fell to -$88 million per day, the lowest since mid-February. The weekend slide toward $76,800 triggered $584 million in long-position liquidations alone, per exchange data.
Contrasting signals from the economy
Not all economic data pointed to weakness. The Empire State Manufacturing index surged to 19.6 against a consensus of 7.0, suggesting the factory sector is still running hot. That strength, combined with sticky inflation, gives the Fed little reason to ease — and reinforces the hawkish narrative Warsh is expected to push.
CryptoQuant noted that Bitcoin's April advance was accompanied by the fastest growth in BTC perpetual futures open interest in 2026. That leverage built up during the rally is now unwinding fast, amplifying the sell-off.
The key level to watch is $76,000. If that support breaks, $70,000 becomes the next major target. All eyes are now on the June FOMC meeting and any hints from Warsh about the rate path. For now, the macro backdrop is about as unfriendly to risk assets as it gets.
