Since May 7, BTC spot ETFs have seen a cumulative net outflow of over 4 billion USD, with only 2 days of net inflows.

Written by: Mahe, Foresight News

In the early morning of June 4, after struggling around the 65,000 USD mark, the price of Bitcoin ultimately failed to hold its ground, dropping below 62,000 USD and reaching a low of 61,383 USD. ETH is also not optimistic, with the current price briefly falling to 1,717 USD, and SOL dropping below 70 USD. The market fear index has dropped to 19, once again falling into extreme panic.

The market bulls have been severely hit. According to coinglass data, over the past 24 hours, the entire network saw liquidations of 1.303 billion USD in open contracts, with long positions liquidating 1.13 billion USD, and the largest single liquidation occurring on HTX, where BTC-USDT contracts valued at 59.6723 million were liquidated. Some Ant miners have reached their shutdown price.

Traditional financial markets and the cryptocurrency market are gradually showing diverging trends. The S&P 500 index continued to create historical highs in June, briefly standing above 7,600 points; the Nasdaq index also set a record at 27,190, but both indices experienced a pullback on June 3. The S&P 500 index fell by 0.74%, while the Nasdaq dipped by 0.89%. The Nikkei 225 index saw a daily decline of 2.00%, and the KOSPI index in South Korea fell by 1.98% on the day.

Meanwhile, AI-related tokens have strengthened against the trend, highlighting significant internal differentiation in the cryptocurrency market.

Later yesterday, NEAR briefly broke through 3 USD, and WLD surpassed 0.56 USD, although both have seen some pullback since then. ENA rose over 20% in 24 hours, briefly breaking through 0.1 USD. The prediction market platform token OPN surged from 0.1 USD to a high of 0.27 USD.

An overview of the market shows that mainstream altcoins generally followed Bitcoin's pullback, but vertical narrative tracks, especially AI infrastructure projects, attracted funding. This indicates that there is a rotation of funds occurring within the market: shifting from macro beta-driven Bitcoin to vertical tracks with real use cases and revenue expectations.

Outflows from spot ETFs become key selling pressure

The US spot Bitcoin ETF is the most direct driving factor for this round of pullback.

SoSoValue data shows that since May 7, Bitcoin spot ETFs have faced significant net outflows. Among them, there was a net outflow of 635 million USD on May 13, 648.64 million USD on May 18, and a rare net outflow of 733.43 million USD on May 27. On June 1 and 2, the daily average net outflow exceeded 480 million USD.

Since May 7, BTC spot ETFs have seen a cumulative net outflow of over 4 billion USD, with only 2 days of net inflows, and the amounts did not exceed 150 million USD.

BlackRock's iShares Bitcoin Trust (IBIT) has continually dominated outflows, with daily redemption scales often in the hundreds of millions of USD, and near the beginning of June, the outflows on a single day approached 440 million USD.

These outflows directly translate to selling pressure in the spot market. Although the proportion of ETF holdings in total Bitcoin supply remains around 2.2%, the AUM size has significantly retreated from its peak, reflecting that institutional investors are prioritizing risk reduction in the context of rising macro uncertainty.

Federal Reserve's interest rate cut expectations this year prove empty

The Federal Reserve's policy path has further tightened expectations for the liquidity of risk assets. The current federal funds target rate range remains at 3.50%-3.75%. According to the CME FedWatch tool, prior to the next FOMC meeting on June 17, market pricing indicates about a 97% probability of keeping rates unchanged, with rate cut expectations being significantly postponed.

Latest data from Polymarket shows that the market is now betting that the Fed will remain inactive this year at a rate of 69%, with the probability of a single rate cut (25 basis points) being just 19%.

The Fed's "higher for longer" policy environment has pushed up risk-free yields, compressing risk premiums and placing pressure on growth and speculative assets sensitive to valuations.

Cryptocurrencies like Bitcoin are highly sensitive to liquidity and interest rates. The combination of ETF outflows, divergence from the US stock market, and policy expectations has collectively created short-term macro headwinds. Historical experience shows that during phases when the Fed pauses interest rate cuts, risk assets often experience amplified volatility and valuation reassessments.

Future trends

BIT recently stated that if Bitcoin breaks below 63,445 USD, it may enter a deeper adjustment and consolidation phase.

Wintermute also recently stated that the S&P 500 index has risen for the ninth consecutive week, while cryptocurrencies have missed this wave of upward momentum. Bitcoin ETFs are undergoing the longest redemption wave since their launch, with market capitalization evaporating again by 1.4 billion USD, and strategy ETFs have also begun selling off. HYPE has broken through 70 USD, decoupling from other indices. Risk appetite has flowed into the Nasdaq and Russell 2000 indices. Cryptocurrencies, as the most risk-sensitive cross-asset category, have been overlooked by the market. This is typical bear market behavior, and this situation has persisted for some time.

The reason is simple: the stock market has profit stories to support it, while the cryptocurrency market does not. In the long run, the market outlook is more optimistic than the prices indicate. Despite ongoing debates about whether we are in a bear market, we believe the market cycle is resetting. The market landscape over the next few months looks relatively weak, but we see some long-term investors beginning to accumulate through over-the-counter trading platforms. They do not want to accurately predict the bottom but consider the current price levels attractive from an 18-month perspective.

Placeholder partner Chris Burniske stated that signs of early emotional capitulation are appearing, but we are still far from the "numb phase."