Key takeaways:
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Bitcoin price fell 1.4% to $102,460 amid US economic concerns, with daily trading volume up 94%, indicating the return of sellers.
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Moody’s US credit downgrade to Aa1 and a class-action lawsuit against Strategy add to BTC’s headwinds.
Bitcoin’s (BTC) price has dropped by over 1.4% over the last 24 hours to $102,460 as concerns over the health of the US economy sour investor sentiment. Its daily trading volume has jumped by 94% to $66.6 billion, suggesting that the sell-side activity is intensifying.
Macroeconomic uncertainty drives Bitcoin price down
Moody’s downgrade of the US credit rating from Aaa to Aa1 on May 16, citing rising debt and deficits. This has heightened macroeconomic uncertainty, contributing to a decline in Bitcoin’s price on May 19.
This downgrade and fears of inflation spurred by potential tariff policies under President Donald Trump have rattled financial markets, increasing Treasury yields and triggering risk-off sentiment.
“The 30Y Note Yield is above 5.00% and the 10Y Note Yield is up another +11 bps,” said capital markets commentator The Kobeissi Letter in a May 19 post on X, adding:
“If the Trump Administration does not intervene here, 8% mortgages are coming.”
Higher yields increase borrowing costs, hurting businesses and consumers, especially amid recession fears and fiscal concerns.
Adding to the sell-side pressure is the news that a class action lawsuit has been filed against Strategy, the largest corporate Bitcoin holder.
According to a May 19 filing with the US Securities and Exchange Commission (SEC), the company faces a class-action lawsuit that accuses Strategy officials of failure to accurately represent the nature of Bitcoin investments.
🚨 JUST IN: MicroStrategy hit with class action lawsuit over alleged misleading statements tied to its Bitcoin strategy and $5.9B unrealized Q1 loss. pic.twitter.com/TdJJfUZTRe
— Cointelegraph (@Cointelegraph) May 19, 2025
Strategy, holding 576,230 BTC worth approximately $59.9 billion at current rates, is a major player in the crypto space.
The lawsuit introduces uncertainty about the company’s financial stability and casts doubts over its aggressive Bitcoin accumulation strategy.
Over $87 million in long BTC positions liquidated
BTC’s drop on May 19 is accompanied by massive liquidations in the derivatives market, signaling strong bearish pressure.
Over $87 million worth of long Bitcoin positions have been liquidated over the last 24 hours alone, compared to $15 million in short liquidations. More than $43 million long BTC positions were liquidated over the last 12 hours alone, against just $2.55 million in short positions.
Bullish traders are forced to close their positions when long positions are liquidated. More than $674 million in leveraged positions were liquidated across crypto assets in the past 24 hours.
The scale of these liquidations mirrors the period between April 10, when a total of $65 million in long BTC positions were wiped out, accompanied by a 6.5% drop in price on the same day.
Meanwhile, Bitcoin’s open interest (OI) has also increased sharply over the last 14 days, up 12% from $70.01 billion on May 19 to $62.56 billion on May 5. The OI is now just 2.3% away from the $71.8 billion all-time high recorded on Dec. 19, 2024.
Bitcoin’s bearish divergence
Bitcoin’s drop today precedes a period of growing bearish divergence between its price and the relative strength index (RSI).
The daily chart below shows that the BTC/USD pair rose between May 9 and May 19, forming higher highs. But, in the same period, its daily RSI descended from 76 to 63, forming lower highs, as shown in the daily chart below.
A divergence between rising prices and a falling RSI usually indicates weakness in the prevailing uptrend, often prompting traders to take profit.
The chart above also shows an area of stiff resistance on the upside, stifling BTC’s efforts to rise higher. These are areas defined by the $104,600 to $109,000 supplier congestion zone. Bulls are required to push the price above the all-time high of $109,000 to continue the uptrend.
“Bigger Bitcoin correction has started?” said popular crypto analyst AlphaBTC in his latest Bitcoin analysis, adding that the price is likely to drop to $100,000 this week in response to the US credit rating being downgraded.
“Most likely it will be a quick correction in markets, so we watch how $BTC reacts and if it can get back above $103K, or roll over and head to the low $90Ks first?”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
