Summary of the Current Downtrend: Market Fears Interest Rate Hikes, US-Iran Tensions Escalate, Crypto Market Continues to Bleed Out and Struggles to Regain Bullish Momentum
BlockBeats News, May 28th. Today, Bitcoin fell below $74,000, Ethereum dropped below $2,000, SOL struggled to stay above $80, and HYPE and ZEC retraced some of their gains. Meanwhile, spot gold and silver followed a global capital market downturn, with gold falling below $4,400 per ounce and silver below $73 per ounce. U.S. stock index futures and the Japanese and South Korean stock markets all declined simultaneously. The U.S. Bitcoin spot ETF saw net outflows for the 8th consecutive trading day, totaling over $2.6 billion, indicating a weak trend in the crypto market. Below are the key analysis points compiled by BlockBeats before and after this round of decline:
With Kevin Warsh being sworn in as the Federal Reserve Chair, the Fed has officially entered the "Warsh Era." The market has significantly increased its bets on the Fed further tightening its policy. According to CME's "FedWatch" data, traders currently expect a nearly 70% probability of another rate hike by the Fed by 2026, whereas at the beginning of the year, the market had expected a rate cut cycle.
In terms of news, the specter of war has risen again, with the U.S. military claiming deployment and readiness to attack Cuba at any time. In addition, U.S. President Trump stated that negotiations were hopeless and expressed dissatisfaction with the Iran nuclear deal. In the early hours of May 28th, the U.S. military conducted an airstrike on a location in the suburbs of Abbas Port, and thereafter, the Islamic Revolutionary Guard Corps launched an attack on the U.S. military airbase that carried out the strike.
Bankless co-founder Hoffman liquidated their ETH holdings, stating that the monetary narrative had been fully priced in. They still have a positive view of the network but are no longer heavily invested in the asset. "Bitcoin Maximalist" Mark Cuban stated on a podcast that he has sold most of his Bitcoin holdings, disappointed by the underperformance of the "digital gold" narrative.
Crypto analyst Darkfost posted that BTC spot trading volume has plummeted by 81% since October 2025, indicating a clear bearish signal and a lack of upward momentum. CryptoQuant analyst Axel Adler Jr. stated that Bitcoin has recently lost its structural bullish momentum, with the current market closer to a "risk-off" phase. He pointed out that BTC's structural bullish momentum disappears when the macro environment deteriorates rapidly, which is a significant signal. CoinDesk analyst James Van Straten said that Coinbase's negative premium clearly indicates that U.S. institutions are selling Bitcoin and shifting to buy AI/semiconductor-related products.
Concerns about security in the crypto industry have intensified, with a DeFi protocol being hacked for nearly $630 million in April. A new model Mythos, represented by Anthropic, a top AI model, has become a new variable shifting the balance of cyberattacks and defenses. This model's general code reasoning ability has significantly improved, enabling it to autonomously discover thousands of zero-day vulnerabilities. Bankless co-founder Ryan Sean Adams stated that AI is granting hackers "dark superpowers." Crypto security company OpenZeppelin co-founder Manuel Aráoz stated that "all DeFi" is insecure and advised friends and family to exit all DeFi positions, even low-risk positions in "blue-chip" protocols like Aave are not safe.
Furthermore, the US stock market is experiencing a mega IPO wave, while the crypto market faces a liquidity "siphon" test. As of today, several high-valued tech companies such as SpaceX, OpenAI, Oura, Anthropic, and Databricks are actively preparing to debut on the Nasdaq or NYSE. The areas covered by this IPO frenzy include AI, software, quantum computing, space exploration, defense technology, fintech, consumer health tech, adtech, and fleet/iot platforms. At the same time, crypto companies' IPO plans have almost come to a standstill, with crypto unicorns valued at tens of billions of dollars like Kraken, Ledger, ConsenSys shelving their listing plans with a total valuation exceeding $20 billion.
