Trading moment: The shadow of inflation looms over risk assets, Bitcoin fluctuates testing the $74,000 support.

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

Macroeconomic Market

All three major U.S. stock indices closed down, with the Dow Jones dropping 0.65% to 49,363.88 points; the S&P 500 index fell 0.67% to 7,353.61 points; and the Nasdaq dropped 0.84% to 25,870.71 points. The S&P 500 index and Nasdaq recorded three consecutive declines. The April CPI unexpectedly rebounded year-on-year to 3.8%, marking the first negative growth in real wages in three years, combined with energy supply shocks caused by geopolitical conflicts between Trump and Iran, 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 soared to over 80%.

Long-term U.S. and Japanese bonds are experiencing an epic sell-off, with the yield on 30-year U.S. Treasury bonds breaking 5.20% in intraday trading, reaching the 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 Japanese bond yield hitting its highest level since the late 1990s. Morgan Stanley's CEO for Japan warned that if the Bank of Japan fails to raise interest rates in June, the yen exchange rate could face extreme fluctuations, potentially impacting both the bond and foreign exchange markets.

The newly appointed Federal Reserve Chairman Kevin Warsh has not yet formally taken office but has already been surrounded by the market and peers. In the face of rising yields, Subadra Rajappa from Societe Generale notes that this poses a challenge to Warsh's dovish tendencies. Former Federal Reserve economist Julia Coronado stated that the war has exacerbated fiscal deterioration, and the only path to rate cuts is through an economic recession. Trump suddenly said he "will let himself set the rates", and analyst Derek Tang believes this is an excuse being preemptively sought by the White House for not lowering rates in June.

As for the Japanese stock market, the Nikkei 225 index has fallen for five consecutive days, dropping below the 60,000-point mark, with SoftBank Group once falling over 8%, marking the largest single-day decline since April 28. Additionally, the South Korean stock market has also been severely impacted, suffering from the breakdown of negotiations between Samsung and the union after 15 hours and the impending 18-day large-scale strike set to begin on Thursday, causing the KOSPI index to plunge over 3%, falling below 7,100 points. Analyst Eamonn Sheridan pointed out that the market is closely monitoring the situation of affected production lines.

AI and the Stock Market

The faith in tech stocks is being tested, as giants engage in fierce battles between overbought technicals and strong fundamentals. Market funds are withdrawing from excessively crowded trades, with only one-fifth of S&P 500 stocks outperforming the overall index. Nvidia's upcoming earnings report on May 21 is seen as a glimmer of hope for the market but also the eye of the storm.

The options market shows a rare 6% implied volatility, with Goldman Sachs analyst Peter Callahan warning that the technicals have sent the most extreme warnings since 1999. Nevertheless, Goldman Sachs maintains a buy rating on Nvidia, setting a 12-month price target of $250. While Goldman is optimistic about Nvidia's performance, analysts warn that market expectations are already high, and exceeding expectations alone may not significantly drive stock prices up. Major downside risks include slowing AI infrastructure spending, increased competition, and supply chain issues. At the same time, SpotGamma data shows that traders, while chasing prices higher, are also purchasing deeply out-of-the-money put options for tail hedging against potential risks.

Although Google launched lighter and cheaper Gemini 3.5 Flash and all-weather AI agent Gemini Spark, along with the Omni model at the I/O conference to compete with OpenAI, Google's stock still fell over 2%. Meanwhile, Silicon Valley chipmaker Marvell rose over 4%, and storage giants SanDisk and Micron saw their stocks rise nearly 4% and 2.5%, respectively. Additionally, Bakkt experienced a single-day surge of 19% due to Executive Michael Alfred's $4.85 million internal share purchase and transformation towards stablecoin infrastructure.

Bitcoin Market

Bitcoin has dropped for five consecutive days after being rejected in its attempt to break through the 200 EMA, nearly falling below $76,000. The surge in U.S. Treasury yields and strong dollar have placed immense pressure on risk assets, leading to nearly $1 billion in losses for the U.S. spot Bitcoin ETF in just two trading days. Although the CME left a gap at $79,122 and strong buying exists around $76,000, the crypto market remains overshadowed by strong wait-and-see sentiment in the short term.

Bearish Views

Core Logic: The strengthening macro dollar and soaring Treasury yields have drained liquidity from risk assets, with heavy selling pressure above and technical indicators suggesting deeper pullbacks.

Killa: Bitcoin may first test $77,400 in the short term and then further probe $78,500, after which the market will focus on the CME gap. If prices are accepted back into the current range, it may further dip to the $74,000 area; Bitcoin prices may experience frequent fluctuations and washes in the next 2-3 months.
LP: The dollar index (DXY) is advancing towards the 100 mark; a strong dollar will inevitably lead to a weak Bitcoin. If the cycle repeats, Bitcoin will drop to the $50,000 range.
Max Trades: The order book shows there is huge selling pressure in the $80k-$84k range, while buying support is relatively weak, making it highly likely that prices will sweep down towards the $75k area.
Cheds Trading: Daily level formations may create a double bottom at the lower Bollinger Band, expecting a rebound to $78.5k before turning down again.
Mizer: The most likely scenario now is either a rebound to $79k to lure in buyers or a direct crash to $72k, but ultimately the path is to continue dipping slightly above $60,000.
CrypNuevo: A price retracement to the liquidity pool at $71k is probable, and a retest and resistance at $79k is also possible.
CryptoJack: The CME has a gap at $79,122, but the price may first decline towards $75,000.

Bullish Views

Core Logic: The current pessimistic sentiment is misleading; major funds are actively accumulating near key support levels, and expectations for macro easing will ultimately push up coin prices.

K33 Research: This bear market is different from previous ones; the derivatives market shows exceptionally pessimistic behavior (the funding rate has been negative for 81 consecutive days), traders are highly defensive, and the $60,000 from February is likely the maximum retracement of this cycle.
Murphy: The chip distribution shows that funds that entered at $78,000 have not panicked out, while funds at $76,000 have already been scooped up. A reasonable pullback range is between $78,000 and $66,000, and a second retest will enhance the structure's resilience.
Altcoin Sherpa: $60k is the bottom; it is currently just oscillating in this area. Once the large-level closing price breaks through recent highs, Bitcoin will rush towards $100,000.
Ali Charts: Based on the MVRV pricing band, as long as Bitcoin holds above $72,960, there is a chance to rebound to $94,850.
CryptoCache: Binance whales are still bullish, placing a massive limit order worth around $74 million to go long at $76,740.
mooncake: The buy order at $76.3k has remained strong for nearly 10 hours under negative CVD, and any short-term drops will be actively absorbed by buyers.

Key Data (As of May 20, 14:00 HKT)

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

Bitcoin ETF: -$331 million, net outflow for 3 days
Ethereum ETF: -$86.3066 million, net outflow for 6 days
SOL ETF: +$3.7829 million
XRP ETF: +$1.4765 million
HYPE ETF: +$11.0430 million
Fear and Greed Index: 27 (Fear)
Upbit 24-hour trading volume ranking: XRP, BTC, ETH, TRAC, ONDO
Sector Gains and Losses: The crypto market fell across the board, with only DeFi and SocialFi sectors relatively resilient

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

Today's Outlook

Meta plans to lay off 20% of its employees on May 20 and transition 7,000 to AI positions
Coinbase will suspend trading of 12 perpetual contracts on May 21
KAITO will unlock about 17.6 million tokens, worth about $7.9 million
LayerZero will unlock 25.72 million tokens, worth about $37.02 million
Nvidia will release its Q1 earnings report at 4:20 PM on May 21
The Federal Reserve will announce the minutes of its monetary policy meeting (May 21, 02:00)
U.S. initial jobless claims for the week of May 16 (in thousands): expected 21, previous value 21.1 (May 21, 20:30)

Today's largest gainers in the top 100 cryptocurrencies by market cap: Venice Token up 17.70%, XDC Network up 15.70%, Siren up 4.20%, Zcash up 3.20%, Algorand up 3.10%.

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