In the early hours of June 4th, after struggling to hold above the $65,000 level, the price of Bitcoin finally broke down below $62,000, hitting a low of $61,383. ETH also faced selling pressure, dropping to $1,717 at one point, while SOL fell below $70. The market fear index dropped to 19, once again entering extreme fear territory.
The market bulls took a heavy hit, with data from Coinglass showing that in the past 24 hours, there was a total of $1.303 billion in liquidated long positions across the entire network, with long positions worth $1.13 billion being liquidated. The largest liquidation occurred on HTX, where a BTC-USDT position worth $59.6723 million was liquidated. Some Antminers have reached their shutdown price.
Traditional financial markets and the crypto market are gradually diverging. The S&P 500 index continued to hit new all-time highs in June, briefly surpassing 7,600 points, while the Nasdaq index also reached a record high of 27,190 but saw a pullback on June 3rd.
The S&P 500 fell by 0.74%, the Nasdaq fell by 0.89%, the Nikkei 225 index experienced an intraday drop of 2.00%, and the KOSPI fell by 1.98%.
Meanwhile, AI-related tokens showed strength, highlighting a clear divergence within the crypto market.
Yesterday, NEAR briefly surpassed $3, WLD broke $0.56, but has since retraced. ENA surged over 20% in 24 hours, briefly exceeding $0.1. The prediction market platform token OPN surged from $0.1 to a high of $0.27.
A market overview shows that mainstream altcoins followed Bitcoin's correction, but the vertical narrative track, especially AI infrastructure projects, received funding favor. This indicates an internal market rotation: from Bitcoin, which is driven by macro beta, to vertical narratives with real-world use cases and revenue expectations.
Spot ETF Outflows Become Key Selling Pressure
The U.S. spot Bitcoin ETF has been a direct driver of this round of correction.
According to SoSoValue data, since May 7th, the Bitcoin spot ETF has seen significant net outflows. There was a net outflow of $635 million on May 13th, $648.64 million on May 18th, and a rare single-day net outflow of $733.43 million on May 27th.
On June 1st and 2nd, the average daily net outflow exceeded $480 million.
Since May 7th, the BTC spot ETF has seen cumulative net outflows of over $4 billion, with only 2 days of net inflows so far, none of which exceeded $150 million.
The iShares Bitcoin Trust (IBIT) under BlackRock has continued to lead outflows, with daily redemption amounts often in the hundreds of millions of dollars range. Around June 1st, there was a single-day outflow of nearly $440 million.
These outflows have directly translated into selling pressure in the spot market. Although the ETF's holdings still account for approximately 2.2% of the total Bitcoin supply, the AUM has significantly dropped from its peak, reflecting institutional investors choosing to de-risk amid rising macro uncertainty.
Fed Rate Cut Expectations for This Year Fall Through
The Federal Reserve's policy trajectory has further tightened liquidity expectations for risk assets. The current federal funds target rate range is maintained at 3.50%-3.75%. According to the CME FedWatch tool, ahead of the next FOMC meeting on June 17th, market pricing indicates roughly a 97% probability of no rate change, significantly postponing rate cut expectations.
Recent data from Polymarket shows that the current market is betting with a 69% probability that the Fed will stay put this year, with only a 19% chance of a 1-time rate cut (25 basis points).
The Fed's "higher for longer" policy environment has raised risk-free rates, compressed risk premia, and exerted pressure on growth and speculative assets sensitive to valuation.
Cryptocurrencies like Bitcoin are highly sensitive to liquidity and interest rates. The ETF outflows, coupled with U.S. stock differentiation and policy expectations, together form a short-term macro headwind. Historical experience indicates that during phases when the Fed pauses rate cuts, risk assets often experience amplified volatility and valuation reassessment.
Future Trends
BIT recently stated that if Bitcoin falls below $63,445, it may see a deeper correction and consolidation.
Wintermute also recently mentioned that the S&P 500 index has risen for the ninth consecutive week, while cryptocurrencies have missed out on this rally. The Bitcoin ETF faces its longest redemption streak since inception, losing another $1.4 billion in market capitalization, and the Strategy ETF has begun selling off. HYPE has broken above $70, diverging from other indices.
Risk-on sentiment is flowing into the Nasdaq and Russell 2000 indexes. Cryptocurrency, as the highest-risk sensitivity cross-asset class, is being overlooked by the market. This is typical bear market behavior, and this situation has been persistent for some time.
The reason is simple: the stock market has profit stories to support it, while the cryptocurrency market does not. Looking long term, the market outlook is more optimistic than the price indicates. Although there is still some debate about whether we are currently in a bear market, we believe the market cycle is resetting.
The market pattern over the summer months appears relatively weak, but we see some long-term investors starting to accumulate positions through OTC platforms. They are not trying to time the bottom precisely but rather see the current price levels as attractive from an 18-month perspective.
Placeholder partner Chris Burniske, on the other hand, states: Signs of early capitulation are emerging, but we are still far from the "numb phase."
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