Bitcoin under pressure: hold or fold?

Bitcoin is down ~12% on the week to around $65,000, ~50% from the all-time high, extending what is now nearly seven months of a drawdown exceeding 20% from the peak. Headwinds landed in quick succession this week: Strategy's first bitcoin sale since 2022, Iran walking out of talks, and a deep streak of ETF outflows combined to trigger more than $3 billion in long liquidations. Nevertheless, we still believe bitcoin will hit $100,000 by year-end, which would be a key indicator that we are past the bear market.

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Reasons for the drawdown

• Strategy disclosed its first sale since 2022, offloading 32 BTC (~$2.5 million, 0.0038% of treasury).¹ The mechanics are healthier than the headlines; this is the only sale across 100+ transactions in almost five years, and the size itself is immaterial. But the read-through to broader ecosystem sentiment has been disproportionately negative, given that bitcoin currently sits below its average cost basis.
• US spot Bitcoin ETFs are on a 12-session outflow streak of ~$4 billion, the sharpest stretch since late 2025, and have flipped YTD 2026 flows to -$1.9 billion – a reversal from the channel that anchored Q2's rally with over $3 billion of patient-capital absorption across March and April. That said, total ETF balances at ~1.27 million BTC (~6.4% of supply, ~$82 billion) sit just 7% below peak, showing that structural ownership through regulated vehicles has not been materially unwound.
• A cascade of almost $3 billion of crypto long liquidations in the last few days, the largest since late January, exacerbated the negative price action.
• Iran talks deteriorate as Tehran has reportedly stopped talking to mediators, walked back the 60-day Memorandum of Understanding, and vowed to "completely block" the Strait of Hormuz, with oil spiking ~7% on the report. Adding to potential selling pressure, the US Treasury's OFAC has designated Nobitex, Iran's largest digital asset exchange, among others under the "Economic Fury" campaign, introducing sanctioned-wallet unwind risk into the market.² For reference, Iran captured nearly 7% of the total hash rate of the bitcoin market at some point and holds north of $8 billion in digital assets.³
• AI absorbs risk capital as equities continue their AI-led run while bitcoin sits out. The Nasdaq, S&P 500, Russell 2000 and Asia's KOSPI are scratching at fresh all-time highs, and individual names like SK Hynix and Micron have crossed the $1 trillion market-cap mark for the first time, drawing liquidity and attention away from the crypto market.

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What markets are telling us

• $78,000 marks the convergence of the market mean and the 200-day moving average (MA) resistance band, which has capped price in recent rallies. A reclaim is a necessary condition for a shift in momentum. To the downside, $60,000 is the structural support coinciding with the 200-week MA and realized price.
• Bitcoin has slipped ~13% below the short-term holder cost basis, leaving recent buyers underwater, but remains comfortably above the long-term holder and aggregate realized prices, which mark outright capitulation.
• The 24-hour-long flush has cleared local froth as funding has sharply compressed and positioning has now flipped the other way, with over $10 billion of shorts stacked up to the ~$80,000 resistance, which could provide squeeze fuel on any constructive break higher.⁴

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Source: Glassnode and 21shares, data from June 3, 2026.

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Silver linings and fundamentals to watch

• Long-term holders' assets are near highs and up $15 billion year to date. They trimmed around 52,000 BTC during the week as price broke down, modest compared to this year’s accumulation.
• The current ~50% drawdown is well below the ~80% prior-cycle average, while annualized volatility has compressed to ~40% as the asset's institutional bid deepens.
• The crypto ecosystem continues to attract flows into fundamentally strong assets. Hyperliquid is up over 100% this year amid the broader bear market, supported by more than $100 million in net flows into its recent US ETF launches.
• Total stablecoin supply remains above $320 billion and is expanding to new highs through this drawdown, signalling dry powder ready to deploy, a stark contrast to the 2022–2023 winter when it contracted by ~30%. 
• BTC sent to exchanges is well below the peak that accompanied the early February drawdown. The recent uptick of 25,000 daily is modest in context, suggesting that any selling pressure is far from the panic-driven flush we saw earlier this year.
• BTC sits at the intersection of two dominant themes: tech and inflation expectations. This makes it one of the few assets that should participate in both the AI capex trade and the debasement trade. With tech valuations stretching and gold elevated on sovereign-flow demand, investors may seek relative value in a theme that sings a similar tune.

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Bull vs. bear case scenarios 

Bull case → Range holds, gradual recovery (high probability)

• BTC defends the structural support and slowly rebuilds the base for the next attempt.
• Reclaim of $78,000 on a weekly close confirms a regime shift and reopens the path toward $82,000–85,000, with lopsided shorts above spot providing potential fuel for a squeeze.
• ETF outflows exhaust, Strategy-related negative sentiment dwindles, and CLARITY is signed in H2, which would underpin the base-case trajectory back toward $100,000.

Bear case → Range fails, deeper retest (low probability)

• The relative-value rotation fails to materialize as geopolitical overhang remains and capital stays concentrated in AI through summer, delaying any BTC catch-up rally into late Q3.
• A decisive break below $62,000 targets the $50,000–55,000 structural floor.

We have moved to the bear scenario we outlined for this year, but in our view, the cycle remains intact, with key anchor levels holding.

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Footnotes:

1. US Securities and Exchange Commission. (n.d.). Form 8-K filings — Strategy Inc. (CIK 0001050446) [EDGAR filing database]. Retrieved June 4, 2026, from https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001050446&type=8-K
2. US Department of the Treasury. (2026, June 3). Economic fury targets Iran's largest digital asset exchange for terror finance and sanctions evasion. Office of Foreign Assets Control. https://home.treasury.gov/news/press-releases/sb0519
3. Irrera, A., & Kharif, O. (2026, March 4). Iran's $7.8 billion crypto market draws fresh attention in war. Bloomberg. https://www.bloomberg.com/news/articles/2026-03-04/iran-s-7-8-billion-crypto-market-draws-fresh-attention-in-war
4. Coinglass. (n.d.). Bitcoin liquidation heatmap. Coinglass. Retrieved June 2, 2026, from https://www.coinglass.com/BitcoinOpenInterest

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