Bitcoin briefly fell to $58,000 this week, marking its lowest level in nearly two years, as heavy outflows from spot ETFs and pressure in derivatives markets triggered more than $1 billion in long liquidations. The cryptocurrency later recovered slightly to around $59,500 but remained under sustained pressure.
Etf outflows and derivatives weigh on Bitcoin
Weak demand from institutional products added to the downturn. Spot Bitcoin ETFs recorded hundreds of millions of dollars in net outflows, including one of the largest daily withdrawals of the year midweek. Altogether, redemptions exceeded half a billion dollars over the past week, signaling reduced appetite among traders.
Options markets also reflected bearish positioning. Ahead of a $13 billion expiry, the majority of call options were set at levels far above current prices, making them unlikely to pay out. Put options exceeded calls by billions of dollars in open interest, showing increased hedging and downside expectations.
Macro data shifts capital toward equities and bonds
The sell-off coincided with fresh U.S. inflation data. The Personal Consumption Expenditures index rose 4.1% year-over-year in May, reinforcing expectations that interest rates could remain higher for longer. Futures markets now indicate an 80% probability of another rate hike by December.
Rising yields have made traditional assets more attractive. Five-year U.S. Treasuries are offering returns above 4%, drawing capital away from non-yielding assets like Bitcoin.
At the same time, falling oil prices have eased inflation concerns and supported broader market sentiment. Brent crude declined sharply over the past month, freeing up capital that has largely rotated into equities.
Tech stocks draw trader attention
Technology shares have outperformed, pulling focus away from digital assets. Chipmakers led gains after strong earnings and policy support in the United States.
- Micron Technology rose 16% after reporting strong results
- Sandisk gained 18%
- Applied Materials advanced 10% following new product announcements
These moves were reinforced by government initiatives, including a federal stake in Intel, funding proposals for quantum computing, and expanded access to land for data center development.
Growing divergence from equities
Bitcoin’s recent performance stands in contrast to the rally in equities. The combination of ETF outflows, attractive bond yields, and strong tech stock momentum has created stiff competition for capital.
On-chain data adds another layer of risk, with a notable share of Bitcoin supply currently held at an unrealized loss. This raises the possibility of further selling if prices fail to stabilize. Market participants are also watching long-term holders for signs of distribution that could increase supply pressure.
Outlook remains uncertain
With macroeconomic conditions driving asset allocation, Bitcoin’s near-term direction appears tied to interest rate expectations and broader market trends. Traders are now looking for new catalysts beyond equity market strength to determine whether the cryptocurrency can regain momentum in the coming months.
Worried by Bitcoin’s sharp drop? Learn how macro trends shape BTC’s next move in this in‑depth guide.
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