Bitcoin hovered near $61,000 on Wednesday, close to a new cycle low, as persistent outflows from exchange-traded funds, geopolitical tensions, and a shift in market focus toward artificial intelligence continued to weigh on sentiment. Ether also remained under pressure, trading below $1,630 and extending losses across major cryptocurrencies.
Etf outflows deepen pressure
U.S. spot Bitcoin ETFs recorded $77.4 million in net outflows on June 9, marking a third consecutive day of withdrawals. Spot Ethereum funds also saw $40.9 million leave, including $17.4 million from a single trust.
Over the past four weeks, Bitcoin ETFs have lost around $5.4 billion, the largest sustained withdrawal in more than a year, according to CoinShares data. The prolonged outflows point to weakening conviction among traders who had previously driven strong inflows earlier in the year.
Macro forces weigh on crypto sentiment
Broader macroeconomic pressures have added to the downturn. Rising tensions between the United States and Iran, combined with a stronger-than-expected May jobs report, have lifted inflation expectations and reduced risk appetite.
Recent U.S. data showed headline inflation rising 4.2% and core CPI increasing 2.9%, pushing the likelihood of another Federal Reserve rate hike to around 70%. Higher yields and tighter financial conditions have continued to pressure growth-sensitive assets, including cryptocurrencies.
Capital shifts toward ai sector
At the same time, capital has increasingly rotated into artificial intelligence-related equities, further draining liquidity from crypto markets. Analysts estimate that 80% to 85% of recent S&P 500 gains have come from AI-linked companies, highlighting a concentrated shift in market momentum.
Some market participants argue this reallocation is unlikely to reverse quickly, particularly as corporate earnings continue to reinforce enthusiasm around AI-driven growth.
Conditions for a potential rebound
Analysts say several developments could support a recovery in digital assets:
- A de-escalation of geopolitical tensions
- New regulatory or technological catalysts within crypto
- A slowdown in AI-driven capital flows
- A shift in expectations around monetary policy
Until key inflation data and corporate earnings are fully absorbed, markets are expected to remain cautious and vulnerable to further deleveraging, according to QCP Capital.
Valuation signals mixed but improving
Despite recent declines, some indicators suggest Bitcoin may be trading below its long-term average. Metrics such as net unrealized profit and loss and market cap-to-thermocap ratios point to undervaluation, though not to the extent seen during previous lows like the period following the FTX collapse.
The current drawdown has been relatively moderate, supported by broader access through ETFs, improved infrastructure, and more diversified market participation.
Loss positions hint at potential turning point
Data from K33 shows that more than half of all Bitcoin in circulation is currently held at a loss. Historically, such conditions have often preceded market rebounds, typically after one final leg lower.
Market outlook remains fragile
The broader environment reflects a market caught between tightening macro conditions and shifting speculative interest. Digital assets have struggled to act as safe havens, declining alongside equities as capital moves into U.S. Treasuries and AI-driven stocks.
Traders are also watching internal market rotation, with Ethereum ETFs recently attracting inflows on a day when Bitcoin funds saw heavy outflows, suggesting capital may be shifting within the crypto sector.
Meanwhile, regulatory developments remain in focus. The Clarity Act, currently under consideration in the U.S. Senate, faces declining odds of passage this year. Delays could postpone the establishment of a comprehensive regulatory framework, leaving an additional layer of uncertainty over the market.
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