After entering June, the decline in the cryptocurrency market has shown signs of acceleration. Unlike before, this round of decline almost offers no breathing room for the bulls, with all rebounds appearing weak and ineffective. Multiple key support levels have been consecutively breached, and the market has gradually evolved from a phase of adjustment to a liquidity-driven sell-off.
More notably, the cryptocurrency market and the Nasdaq are displaying a rare divergence in trends. On one side, U.S. stocks, especially in the AI sector, are continuously hitting new highs, while on the other side, the cryptocurrency market is persistently declining with capital flowing out at an accelerated pace. This indicates that market risk appetite has not disappeared, but rather that funds are choosing a new direction. Compared to cryptocurrency assets, capital is more inclined to chase highly certain popular sectors.
From a funding perspective, June is one of the tightest liquidity phases. A large number of IPO projects are starting to raise funds, creating a noticeable bloodletting effect on the market. At the same time, the concentration of funds within U.S. stocks has reached an extremely high level. The CBOE discretion index has risen to the third highest level in history, indicating that capital is gathering at an unprecedented speed towards a few leading AI companies, while the cryptocurrency market is being gradually marginalized.
More critically, Bitcoin spot ETFs are experiencing the most severe outflow of funds since their launch. There has been a net outflow for 11 consecutive trading days, with a total outflow exceeding $2.3 billion in May. After losing support from incremental funds, the already fragile market balance has been completely shattered.
The most dangerous aspect of this round of sharp declines lies in the leverage structure. In just two days, the total liquidation across the network exceeded $1.5 billion. Many high-leverage positions were forcibly liquidated, forming a typical:
Price decline → Forced liquidation → Increased selling pressure → Further price decline
Once this death spiral forms, the market often enters an irrational stage, only returning to stability when leverage has been adequately washed out and market sentiment cools down.
Overall, the biggest enemy in the market right now is not the technical aspect but liquidity. Without funds entering the market, even the best structure would struggle to support an increase. The real bottom often appears when everyone no longer believes in any rebounds.
Trading suggestion: short at 68450, stop loss at 69050
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This article is originally published by 【Huiying Community】 and represents personal views only. Due to the inherent delay in information transmission, the content is for reference only and does not constitute any investment advice. Please make rational judgments and operate cautiously.
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