Bitcoin Endures Its Sharpest Weekly Slump in Months as Narrative Fades and Liquidity Rotates
Bitcoin is under heavy pressure as June begins, with the cryptocurrency losing momentum while market liquidity moves into other assets that currently have stronger narratives and clearer catalysts. Bitcoin is down 13% this week and is on track for its worst weekly decline since February, according to Coin Metrics. The recent weakness reflects a familiar pattern in crypto cycles: when the dominant story fades, capital often rotates quickly elsewhere, leaving bitcoin exposed to sharper price swings driven by flows rather than fundamentals.
A major factor behind the selloff has been the behavior of bitcoin exchange-traded funds. On Wednesday, bitcoin ETFs posted their 13th straight day of net outflows, the longest streak on record, according to SoSoValue. Total assets in the funds fell to $82.8 billion from $107.8 billion on May 14. Citi analyst Alex Saunders said ETF flows remain the main driver of bitcoin price performance and noted that a key catalyst for renewed interest — passage of the crypto market structure bill known as the Clarity Act — appears less likely as legislative priorities shift and lawmakers remain divided. He said sentiment is likely to stay weak unless bitcoin gets positive regulatory news or renewed inflation-hedge demand.
This week’s most notable trigger came on Monday, when Michael Saylor’s Strategy disclosed that it sold 32 bitcoin, worth about $2.5 million, to help fund preferred stock dividend obligations. It was the company’s first bitcoin sale since 2022 and only its second ever. Although the sale was tiny relative to Strategy’s overall holdings, the move surprised investors because it contrasted with Saylor’s long-standing “never sell your bitcoin” message. Strategy and bitcoin both fell sharply after the disclosure.
The selloff then intensified as leveraged traders were forced out of bullish positions. Crypto exchanges saw about $594 million in long liquidations over a 24-hour period, according to CoinGlass. Those automatic liquidations added more pressure to an already fragile market.
Bitcoin is also struggling to fit its usual roles. It has not been acting like digital gold during periods of geopolitical uncertainty, nor has it worked as a reliable inflation hedge or a high-growth tech proxy. Meanwhile, equities have continued to hit record highs, and investors have been rotating into areas such as semiconductors and AI infrastructure. Shares of Advanced Micro Devices, Intel and Micron have more than doubled this year, while private-market excitement around companies such as SpaceX and Anthropic has drawn attention away from crypto.
Looking ahead, investors will closely watch Strategy’s report next Monday to see whether it bought, sold or stayed inactive during the week. A renewed purchase could support sentiment, while another sale or no activity could deepen concern about one of bitcoin’s most important sources of structural demand. Some analysts still point to bitcoin’s historical four-year cycle, which could imply a prolonged bear phase if the pattern continues. According to Wolfe Research, that framework suggests bitcoin may not bottom until below $40,000 in late October, though that outlook remains only one possible path.
