The Dow Jones skyrocketed by 1.73%, and the S&P 500 is boldly setting new historical highs. Meanwhile, the traditional safe-haven king—gold—remains firmly hovering above the strong zone of $4,413.
Bitcoin, revered by countless believers as 'digital gold', hit a low of $61,383 in the past 24 hours. From just a month ago (May 6) when it peaked at $82,500, the pullback has quietly expanded to 26%.
When all assets are on the rise, why is Bitcoin the only one taking a dive?
The U.S. spot Bitcoin ETF has recorded net outflows for 13 consecutive trading days, marking the longest 'bleeding' streak since its launch in early 2024, with a total of $4.33 billion pulled out. In just the past 30 days, around 51,726 Bitcoins have net exited these ETF products, valued at nearly $5 billion.
BlackRock's IBIT had over $527.8 million in redemptions in a single day, setting the second-largest single-day outflow record since its launch. In just the first three trading days of June, IBIT saw $2.58 billion flow out.
The total market cap of cryptocurrencies has dropped below $2.3 trillion, evaporating over $2 trillion compared to the peak in October 2025, a nearly 50% decline. The fear and greed index has plummeted to a chilling low of 12, labeled 'extreme fear,' marking the second consecutive day.
Ethereum has lost the $1,800 mark, down 20% from May's peak; major coins like XRP, SOL, and BNB are not spared, all recording double-digit declines.
In the face of such a brutal scenario, the market has developed two starkly different interpretations, both of which center around Bitcoin's fundamental value and future.
The first theory comes from Bitcoin's biggest 'dead long,' Michael Saylor, founder of Strategy. His logic is simple: the profit growth from AI stocks is too alluring right now, and SpaceX's IPO provides a tangible picture of the space economy. Funds are just temporarily attracted to these sexier stories. He believes it's like water flow; it will always return. The long-term scarcity value of Bitcoin remains unchanged.
However, analysts from Charles Schwab have put forward a more alarming 'alternative theory.' They believe that what we are witnessing may not be a simple rotation, but rather Bitcoin losing the narrative competition at the 'cycle bottom' for the first time.
The profundity of this theory lies in its clarification of how this downturn differs fundamentally from past ones. In the past, when the market was in fear, funds would flow either into the dollar or into gold, and the crypto market would be merely 'collateral damage.' But this time, when funds flowed out of the crypto market, they went to very specific places—the AI sector represented by Nvidia and the upcoming space giant, SpaceX.
When AI stocks can deliver tangible earnings reports, when SpaceX's IPO can let you touch the future of the stars and sea, and when gold has centuries of history backing its safe-haven properties, the narratives of 'digital gold' and 'value storage' that Bitcoin relies on suddenly seem a bit pale and hollow in 2026. Analysts at Charles Schwab sharply point out that this sell-off is not driven by risk aversion but rather a 'narrative substitution' chosen proactively.
It's worth noting that the CPI in the U.S. was still at 3.8% in April, and the tensions in the Middle East have driven up energy prices. This theoretically sets the stage for Bitcoin as an 'inflation hedge.' However, it seems to be heading in the opposite direction, forcing institutional investors who have been trying to convince themselves to embrace the 'digital gold' narrative to reassess the credibility of this label.
In the past few days, over 280,000 high-leverage long positions across the network have been forcibly liquidated. Each wave of cascading liquidations means a batch of the most aggressive bulls has been completely kicked out.
Right now, the market is facing a serious structural issue: where will the new buying power come from after these 280,000 traders exit?
Retail investors? With a fear index of 12 and social media filled with lamentations, the voices calling for bottom fishing are barely audible.
Institutions? The continuous net outflows from ETFs over the past 13 days have already provided the answer: they are currently the most determined sellers.
Corporations? Besides Saylor's company, we haven't heard of any mainstream corporation announcing plans to add Bitcoin to their balance sheets for quite some time.
Retail investors, ETFs, and corporations—these three forces that once drove the bull market are now all net sellers. This has thrown the market into a frightening 'buyer's vacuum.' Theoretically, after such a sharp overselling, a technical rebound could happen at any time, but without new, sustained buying pressure, any rebound could just be another opportunity to 'cut losses.'
The only key signal is the flow of funds into the U.S. spot Bitcoin ETF. Only when that red outflow curve turns green again can we say that the most dangerous moment may have passed.
The next macro catalyst the market can look forward to will be the upcoming Federal Reserve meeting in June. However, according to the CME's FedWatch tool, the market widely expects this meeting to keep interest rates unchanged, with a negligible chance of rate cuts. This means there is unlikely to be any strong stimulus from the macro level in the short term.
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