Bitcoin · SpaceX · CLARITY Act · CNBC Technology
Bitcoin is weathering its ugliest week in months as narrative fades and liquidity rotates
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Bitcoin is getting pummeled to kick off June as the market loses its dominant narrative and liquidity continues to rotate into other assets.
Key facts
- This week's key trigger was a surprise disclosure on Monday from Michael Saylor's Strategy revealing the sale of 32 BTC for about $2.5 million, marking its first bitcoin sale since 2022 and second
- This time the reporter suspect the buying following the selling will be more aggressive, the reporter thinks either 10x (+ 320 BTC) or 100x (+3200 BTC)
- With an average peak to trough period of 381 days and an average drawdown of 79%, it implies that price bottoms below $40,000 in late October
- Crypto exchanges recorded $594 million in long liquidations in a 24-hour period, according to CoinGlass
Summary
The combination has left the flagship cryptocurrency vulnerable to further downside pressure as investors scale back risk and capital shifts toward markets with more momentum or more obvious near-term catalysts, like the chip rally or the SpaceX IPO. It's a familiar feature of crypto cycles: When the main narrative loses momentum, liquidity shifts quickly to other parts of the market. On Wednesday, bitcoin ETFs registered their 13th day in a row, and longest streak ever, of net outflows, according to SoSoValue. The flows are the "primary driver of BTC price appreciation, explaining approximately 45% of weekly return variation, and the best vehicle for tracking investor adoption/appetite," Citi analyst Alex Saunders said in a note.