On-chain analyst Easy On Chain diagnosed that Bitcoin (BTC)'s drop below $80,000 was not accidental but a result of three factors acting simultaneously. According to Cryptopotato, Easy On Chain explained, "The first factor is an increase in exchange net inflow. On May 11 (local time), the net outflow from exchanges was 19,995 BTC, significantly lower than the 28,000-35,000 BTC recorded earlier this month. This means that the amount of sellable assets within exchanges increased, expanding downward pressure. The second is the expansion of short positions in the derivatives market. From May 8 to 10, open interest (OI) increased to 1.04 times the average level, and funding rates turned negative. This is a sign that market participants were betting on a decline. The third is the liquidation of leveraged long positions. From May 11 to 13, approximately $109.7 million worth of long positions were forcibly liquidated, and on May 12 alone, the volume of long liquidations was 11.8 times that of short liquidations. Additionally, the announcement of the US Consumer Price Index (CPI) and Producer Price Index (PPI), along with whale selling, also accelerated the decline."
