Bitcoin managed to hold above the $60,000 threshold on Sunday, though underlying weakness persists after a turbulent week that saw the largest cryptocurrency breach a key support level. The token was last trading at $62,019, up 2.1% from the previous day, after oscillating between $60,420 and $62,839 during weekend trading.
ETF Outflows Reach New Highs
The market's next critical test will come with the reopening of U.S. markets on Monday. The spotlight is on spot bitcoin ETFs, which experienced net outflows of $1.72 billion last weekâthe largest weekly withdrawal in over a year, according to CoinDesk citing SoSoValue data. This marks the fourth consecutive week of outflows, accelerating as prices dipped, a stark contrast to February when outflows eased near $60,000. The persistent selling suggests institutional buyers are not yet viewing this decline as a buying opportunity.
Macroeconomic Pressures Mount
Friday's jobs report added to the bearish sentiment. The U.S. economy added 172,000 nonfarm jobs in May, while the unemployment rate held steady at 4.3%, according to the Bureau of Labor Statistics. This pushed short-term Treasury yields higher, fueling speculation that the Federal Reserve may tighten policy later this year. All eyes now turn to the May CPI release on June 10 and the Fed's policy meeting scheduled for June 16-17.
Bitcoin suffered a 17.3% decline last week, its steepest since the FTX collapse in November 2022, while ether dropped 22%. The broader crypto market shed approximately $390 billion in value, with around $7 billion in leveraged positions liquidated, predominantly bullish bets.
Support Levels Under Scrutiny
The $60,000 support level remains a focal point. After briefly dipping to $59,227 on Saturday, bitcoin rebounded above $61,000, alleviating immediate fears of a sharp breakdown. However, selling pressure persists, and a sustained move below $60,000 could retest levels last seen during February's slump.
Corporate bitcoin holdings also came under the microscope. Strategy Inc, a key proxy for institutional bitcoin interest, disclosed in an SEC filing that it sold 32 bitcoin for $2.5 million between May 26 and 31, at an average price of $77,135 per bitcoin. Despite the sale, the firm still held 843,706 bitcoin at the end of May, with proceeds earmarked for preferred stock distributions.
Analyst Perspectives
Greg Cipolaro, global head of research at NYDIG, attributed the decline to a confluence of factors rather than a single catalyst. These include an AI-driven rally in equities, upcoming tech IPOs, quantum computing concerns, sanctions worries, and Strategy's sale. “Viewed independently, none of these developments appears sufficient to drive a major correction in bitcoin,” he noted.
Vetle Lunde of K33 Research highlighted the rotation into AI stocks, with growing anticipation of listings from OpenAI, Anthropic, and SpaceX. “The opportunity cost of holding BTC is now a bigger issue for some investors,” he said.
Bitcoin’s market dominance has slipped to 56% from 63% a year ago, while stablecoins now account for nearly 13% of the crypto market, up from about 7%. Mark Dowding, chief investment officer at RBC BlueBay Asset Management, remarked that this shift illustrates how assets can move “from being the flavour of the month” to “out of fashion.”
Outlook and Risks
Bears face their own risks. A softer-than-expected CPI print, a halt in ETF redemptions, or steadfast holding by large investors could trigger a sharp short squeeze. Conversely, if bitcoin breaks below $60,000 and ETF outflows persist, leveraged positions could be wiped out, leading to another forced liquidation wave.
For now, bitcoin’s bounce is tentative. This week’s fund flows and inflation data will likely determine whether buyers return or the market is merely catching its breath before another test of the $60,000 level.
