Bitcoin drops to 13th among global assets as 172,000 traders liquidated

Bitcoin fell 5.2% to $72,400 on Thursday, its lowest level in six weeks, as a wave of liquidations wiped out over-leveraged positions and pushed the cryptocurrency to 13th place among global assets by market cap.

"The $74,000 level was a significant pivot point — it served as overhead resistance before the election and became support afterward," Sean Bill, chief investment officer and co-founder of Bitcoin Standard Treasury Company, said. "If the market consolidates below it, bears will target a retest of the February lows just above $60,000."

Bitcoin's market cap dropped to $1.45 trillion from $1.66 trillion in early May, according to CompaniesMarketCap data. The cryptocurrency now trails gold, silver, Nvidia, Apple, Microsoft, Saudi Aramco, Tesla and Meta Platforms. Spot Bitcoin ETFs recorded $733.43 million in outflows Wednesday, the largest single-day exit since Jan. 29, with BlackRock's iShares Bitcoin Trust seeing $527.8 million in outflows — its second-largest since inception, per SoSoValue data. A separate dark pool transaction saw 29 million IBIT shares worth $1.29 billion change hands Tuesday.

The selloff compounds pressure on Strategy, the largest corporate Bitcoin holder with 843,738 tokens. Markus Thielen, head of research at 10x Research, said the company's cash runway to cover its $1.7 billion in annual dividend obligations on its STRC preferred equity has collapsed to 6.1 months, down from a prior estimate of 16 months. Founder Michael Saylor recently acknowledged the company will "probably sell some bitcoin soon."

The liquidation cascade accelerated as Bitcoin broke below the $74,000 support zone. More than $1.07 billion in ETF outflows have already been recorded this week, on track to surpass last week's $1.26 billion exodus, SoSoValue data show. Open interest across major exchanges fell as funding rates flipped negative, with bearish positioning dominating derivatives markets.

Tim Sun, a senior researcher at HashKey, attributed the ETF outflows to rising US Treasury yields forcing institutions to adjust risk weights on their Bitcoin allocations. "If ETF outflows persist while yields remain elevated, Bitcoin still faces further downward pressure," Sun said, identifying $75,000 as a key level to reclaim. The CME institutional options put wall for the nearest expiries sits at $60,000, he added.

Strategy's cash crunch adds to selling pressure

The implications of a potential Strategy selloff extend beyond the company's balance sheet. Thielen noted that the 843,738 Bitcoin acquired over nearly six years had an outsized market impact because the buying spree "provided narrative cover for billions more in institutional inflows." Removing that anchor, he said, "materially weakens the Bitcoin bull case."

Stephen Wundke, strategy and revenue director at Finyx and Algoz Technologies, said the symbolic weight of Saylor selling matters more than the actual volume. "It's not so much how much they sell, it will be that the man who said he would never sell is now selling," Wundke said. "It will create massive headlines, and other digital asset treasuries take a lead from Strategy."

Bitcoin's realized price — the average cost basis of all coins in circulation — is approaching a "death cross" with its 365-day moving average, according to analyst Axel Adler Jr. The last time this crossover occurred was during the 2022 bear market, preceding a 52% decline. Bitcoin currently trades 35% above its realized price of $54,200.

On the upside, bulls need Bitcoin to reclaim and consolidate above the 200-day moving average near $80,000 to regain momentum, Bill said. The next resistance zone sits between $78,000 and $80,000, with a sustained move above $75,000 needed before that becomes attainable.

This article is for informational purposes only and does not constitute investment advice.