Bitcoin falls below $67,000; has liquidity abandoned the crypto market?

Shaw, Jinse Finance

Starting last night, the crypto market continued its volatile decline. Bitcoin sentiment deteriorated sharply, and the market pressure was the most severe in recent months.

This morning, Bitcoin briefly fell below $67,000, hitting a low of $66,201.3, a drop of over 7% in 24 hours. Ethereum hit a low of $1,838.88, a drop of over 7.2% in 24 hours. Most major cryptocurrencies experienced significant declines.

Coinglass data shows that in the past 24 hours, a total of $1.78 billion in positions were liquidated across the network, with $1.597 billion in long positions and $183 million in short positions. Bitcoin long positions liquidated $860 million, Ethereum long positions liquidated $445 million, and Solana long positions liquidated $84.3529 million. In the past 24 hours, more than 278,000 people worldwide have been liquidated.

The AI ​​concept has spurred a continuous rise in US stocks, with leading exchanges launching US stock trading services. Meanwhile, funds are flowing out of spot ETFs, and Strategy has sold off its Bitcoin holdings. These factors combined have resulted in a severe lack of liquidity in the crypto market. The renewed deterioration of the situation in the Middle East has further exacerbated the already fragile market. I. The Crypto Market Remains Sluggish, Bitcoin Falls Below $67,000 This morning, Bitcoin plummeted, briefly dipping below $67,000 to a low of $66,201.3, a 24-hour drop of over 7%. Ethereum followed suit, briefly falling below $1,900 to a low of $1,838.88, a 24-hour drop of over 7.2%. Most major cryptocurrencies experienced significant declines. According to Coinglass data, in the past 24 hours, a total of $1.78 billion in positions were liquidated across the entire network, with $1.597 billion in long positions and $183 million in short positions, primarily long positions. Specifically, $860 million in Bitcoin long positions were liquidated, $445 million in Ethereum long positions, and $84.3529 million in Solana long positions. In the last 24 hours, over 278,000 people worldwide have been liquidated, with the largest single liquidation occurring in Hyperliquid - BTC-USD worth $27.4927 million.

Traditionally, the two major sources of demand that have played a significant supporting role in Bitcoin prices, **spot ETFs and Strategy& are simultaneously becoming drags on prices, further exacerbating market pressure. The AI ​​concept has spurred a continuous rise in US stocks, repeatedly breaking new highs, with leading exchanges launching US stock trading. These factors reflect the current extreme lack of liquidity in the crypto market. The renewed deterioration of the situation in the Middle East has further exacerbated the already fragile market, becoming the "last straw" that broke the camel's back for crypto assets.

II. The "siphoning" effect of the US stock market is significant, with exchanges entering the US stock market trading

The enthusiasm for AI infrastructure continues to drive funds, flowing into semiconductor and data center-related sectors. US stocks closed higher for the ninth consecutive trading day. Alphabet announced plans to raise $80 billion through equity financing, including investment from Berkshire Hathaway, to support its massive AI expansion plans. Goldman Sachs analysts say the catalyst for this US stock market rally was the large-scale capital raising in the technology sector this week.

The S&P 500 index closed up 0.13%, setting a new closing record for the fifth consecutive trading day and closing above the 7600-point mark for the first time. The Dow Jones Industrial Average closed up 0.45%, setting a new closing record for the fifth consecutive day. The Nasdaq index closed up 0.03%, barely continuing to set a new closing record. Bitcoin, however, completely decoupled from the performance of technology stocks.

Furthermore, leading cryptocurrency exchanges, spearheaded by Binance, are actively expanding into the US stock trading market. Binance recently announced that its users will be able to trade over 8,000 US stocks and ETFs. Binance also announced an upcoming plan to allow customers to convert their stock holdings into crypto-like digital assets, part of its grander vision of becoming a "multi-asset financial super app." Additionally, Binance has launched six USDT-margined US stock perpetual contracts. (For details, please refer to the previous article by Jinse Finance, "From Ondo to Alpaca to bStocks: Binance's On-Chain US Stock Ambitions"). Prior to this, Coinbase launched US stock perpetual contracts, OKX open-sourced its AI proxy trading toolkit, and Kraken turned 100 US stocks into on-chain assets. The **Capital Siphon Effect** of the US stock market on cryptocurrencies is mainly reflected in the diversion of liquidity and the shift in market narrative focus. US tech giants, led by AI, are attracting incremental funds that originally belonged to the crypto market due to their more stable returns and solid valuation logic, putting pressure on the crypto ecosystem. The entry of leading crypto exchanges into the US stock market further amplifies this effect, causing a significant outflow of liquidity from the crypto market to the US stock market. III. Strategy's "Breaking Promise" to Sell Cryptocurrencies Creates a Crack in its Treasury Narrative Strategy, the most representative Bitcoin treasury in the crypto market, disclosed on Monday that it sold approximately 32 Bitcoins, realizing about $2.5 million, marking its first reduction in holdings since the end of 2022. Compared to its total Bitcoin holdings of approximately $59 billion, this sale is negligible, yet it breaks the company's long-standing minimalist "buy-only" strategy at a sensitive market moment. Jasper De Maere, an OTC trader at market maker Windemute, stated, "This sell-off appears to have been triggered by Strategy's disclosure of the sale of 32 Bitcoins. However, the reality is that even without this news, market momentum was already waning, and institutional participation in OTC trading was declining to a low level." (For details, please refer to Jinse Finance's previous article, "From Never Selling to First Sale of 32 BTC: What Signal Does Strategy Send?"). Furthermore, according to Strategy's official announcement, Strategy recommends adjusting the frequency of STRC dividend payments from once a month to once every two weeks. If the proposal is approved and adopted, it is expected to shorten the reinvestment lag, enhance liquidity and market efficiency, and improve price stability. The proposal requires a vote from both MSTR and STRC shareholders, and it will only pass if both groups vote in favor. According to the proposal timeline, voting began on April 28 and will end on June 8, the meeting day. Michael Saylor's failure to adhere to his "buy only, don't sell" strategy indicates, to some extent, that even the previously held financial narrative can show cracks during a cryptocurrency bear market. 32 Bitcoins are almost negligible for Strategy, but they have triggered a huge uproar in the entire crypto market. IV. ETF Funds Continue to Flow Out, with No Signs of Relief. On June 2, after recording large-scale outflows in May, the US spot Bitcoin ETF continued its outflow trend, experiencing net outflows for 11 consecutive trading days. According to SoSoValue data, on Monday, US spot Bitcoin ETFs saw a net outflow of $483.8 million, with BlackRock's IBIT experiencing an outflow of $440.3 million. The only product to record a net inflow that day was Morgan Stanley's MSBT, with a net inflow of approximately $6.14 million. Over the past 11 consecutive trading days, US spot Bitcoin ETFs have seen a cumulative net outflow of $3.45 billion. This trend continues the weak performance seen in May. Data shows that in May, US spot Bitcoin ETFs experienced a net outflow of $2.43 billion, marking the largest monthly outflow since November 2025. Galaxy Digital analysis suggests that the continued net outflow of funds from spot Bitcoin ETFs reflects the waning upward momentum of established mainstream cryptocurrencies amidst a risky environment characterized by the emergence of various popular investment themes and increased market volatility. This year, many niche sectors in the crypto market have performed exceptionally well, such as AI-related coins, decentralized exchanges with perpetual contracts, and privacy coins, but Bitcoin has not benefited. Coupled with the diversionary effect of various popular investment themes in the broader market, this round of Bitcoin's bear market is likely to continue. (For details, please refer to Jinse Finance's previous article, "Galaxy: Bitcoin ETFs Enter a Period of Capital Outflow, Bear Market May Continue") ETF funds were once one of the core sources of stable demand for mainstream crypto assets like Bitcoin. Currently, the continuous outflow of ETF funds, with no signs of abating, indicates a sustained loss of market liquidity, making it difficult to support the downward pressure on cryptocurrencies. V. US-Iran Negotiations Remain Tense, Middle East Tensions Resurge. US Secretary of State Marco Rubio stated clearly during congressional questioning on Tuesday that the US has not offered the lifting of sanctions as a condition for restoring navigation in the Strait of Hormuz during negotiations on Iran. He emphasized that any easing of sanctions must be predicated on Iran abandoning its nuclear program. The Trump administration has yet to provide a clear timetable for reaching an agreement to end the conflict. Trump has repeatedly stated that the war would be worthwhile if it could prevent Iran from acquiring nuclear weapons, and claimed that gasoline prices would drop, while continuously emphasizing the imminent arrival of a "good deal." Iran, on the other hand, hopes to push for a temporary arrangement that includes the lifting of sanctions, allowing it to receive billions of dollars in oil revenue. However, the US continues to expand sanctions against Iran and related parties during negotiations. Furthermore, serious disagreements have emerged between the leaders of the US and Israel regarding the situation in the Middle East. According to reports, Trump and Netanyahu held two heated phone calls on Monday regarding military action in Lebanon. During the calls, Trump angrily told Netanyahu that "disobedience will land you in jail," pressuring Israel to abandon its plans to attack Beirut. Israel ultimately did not act, but Netanyahu faced criticism from allies and the opposition at home, accused of "losing sovereignty." Behind this public disagreement lies the contradiction between Trump's eagerness to end the negotiations and Netanyahu's insistence on military action. According to the latest news on June 3, the US Central Command stated that on June 2, the US military successfully repelled multiple ballistic missiles and drones launched by Iran, and conducted a "self-defense strike" on Qeshm Island in response to Iran's planned attacks throughout the Middle East. Iran launched several ballistic missiles at its neighboring countries, but all missiles missed their intended targets. The US Central Command stated that troops will remain on high alert and are prepared to counter any actions by Iran during the current ceasefire. The Iranian Islamic Revolutionary Guard Corps claimed that the headquarters of the US Fifth Fleet was attacked by missiles and drones from the Iranian Revolutionary Guard Aerospace Force. The ongoing geopolitical risks stemming from the Iranian conflict are suppressing investor risk appetite. While cryptocurrencies are gradually entering the mainstream financial asset market, unfavorable macroeconomic factors can still impact it. The renewed deterioration of the Middle East situation has further exacerbated the already fragile market, potentially becoming the final straw that breaks the camel's back. VI. Market Analysis and Interpretation Amidst the continued slump in the crypto market and the ongoing capital flight, let's examine the market's analyses and interpretations. 1. Yi Lihua, founder of Liquid Capital (formerly LD Capital), stated that Bitcoin's decline was smoother than expected. The biggest negative factor was the diversion of funds from the stock market. Faced with AI, which boasts unlimited imagination and fundamental support, crypto, relying on narrative, has fallen from a "sweetheart" to a "past its prime." The next few months will see crypto bottoming out and consolidation until complete settlement and most investors exit. During this time, focus on learning/investing in AI and gradually buying crypto at the bottom. 2. According to BIT analysis, Bitcoin has fallen 16% year-to-date and is entering a historically weak seasonal window. Over the past decade, the average return for Bitcoin in June has been only +0.7%, with summer months typically characterized by consolidation. However, this year's trend may not entirely follow historical patterns. May is usually one of Bitcoin's stronger months, but this year's gains are significantly lower than the historical average, increasing the probability of a seasonal reversal. Meanwhile, several key catalysts are on the horizon, including the launch of regulated US-regulated crypto perpetual futures and the planned Nasdaq-CME crypto index futures on June 8. Despite ongoing seasonal pressures, from a tactical perspective, Bitcoin may be nearing a short-term bottom. If these catalysts generate new buying support, Bitcoin could see a rebound.

3. Tom Lee stated that Bitmine's Ethereum treasury is generating $1 million in daily staking revenue.

4. TD Cowen analyst Lance Vitanza stated that the market's interpretation of the Strategy trade as a significant reduction in Strategy's Bitcoin holdings is misleading. He believes the trade has minimal economic impact and will not change the company's core Bitcoin accumulation strategy, therefore maintaining his $400 target price for MSTR stock.