Bitcoin’s Capitulation Deepens: More Than Half of Supply in the Red as a $2.7 Billion ETF Exodus Meets a Liquidation Tsunami

More than half of all Bitcoin in circulation is now sitting on unrealized losses – roughly 10.5 million coins are underwater, compared with just 9.8 million still in profit. In a single day, investors crystallized losses of $1.3 billion, with long-term holders accounting for $770 million of that pain. The numbers paint a picture of a market in full retreat.

The proximate trigger was a blockbuster US jobs report on June 5. The economy added 172,000 positions in May, more than double the 85,000 analysts had penciled in, while the unemployment rate held at 4.3%. Markets immediately repriced monetary policy: Polymarket now sees a 52% probability of a Fed rate hike by year-end, and the CME FedWatch Tool puts the chance at 42.7%. For a zero-yield asset like Bitcoin, that is kryptonite.

The flight from crypto has been staggering. Spot Bitcoin ETFs posted net outflows of more than $2.7 billion in the week through Thursday, pushing year-to-date outflows to $3.1 billion, according to LSEG. Over the same period, the four largest semiconductor ETFs absorbed over $3 billion; year-to-date, they have hoovered up $21 billion. The AI trade is vacuuming capital out of digital assets with brutal efficiency.

Remarkably, on the very eve of the jobs-driven crash, US spot Bitcoin ETFs had recorded a modest $3.05 million inflow – the first positive reading after 13 consecutive days of redemptions. BlackRock’s IBIT led the charge with $48 million of fresh money, while Fidelity and Ark Invest continued to see outflows. But the respite was fleeting: total assets under management across Bitcoin ETFs have collapsed from $104.3 billion in mid-May to just $80.4 billion.

Should investors sell immediately? Or is it worth buying Bitcoin?

The selloff triggered a cascade of forced liquidations. Over $1.7 billion in positions were wiped out in 24 hours, impacting more than 350,000 traders. Longs bore the brunt, with $1.41 billion in losses. Bitcoin briefly touched an intraday low of $59,100 – almost 20% below the prior week’s level – before bouncing to around $63,800. That still leaves it 13% lower than a week ago and 28% in the red since January.

Technical damage is severe. Bitcoin has broken below its 200-week moving average for the first time since June 2022. The relative strength index sits at 18.2, deep in oversold territory, and the Crypto Fear & Greed Index has plunged to 12 – firmly in “extreme fear” zone. The current price is 49% below the all-time high of $126,000 reached in October 2025 and just a whisker above the 52-week low of $59,228.

On-chain data confirm a demand vacuum. Spot demand for Bitcoin dropped by 272,000 coins over the past 30 days; futures demand fell by 229,000. Within the crypto ecosystem, Bitcoin’s market dominance has shrunk from 63% a year ago to 56%, while stablecoins have doubled their share from 7% to nearly 13%. Tether now sees more daily trading volume than Bitcoin and Ether combined; USDC’s volume matches the next ten coins put together. Large pools of capital are staying inside crypto but rotating out of Bitcoin entirely.

The move into AI-related equities is not the only capital outflow hurting Bitcoin. The broader risk-off mood dragged down semiconductor stocks, Asian indices and emerging-market currencies over the same period. The Nasdaq suffered its worst day since April 2025, and crypto-exposed stocks Coinbase and Strategy each lost around 7%.

Bitcoin at a turning point? This analysis reveals what investors need to know now.

Speaking of Strategy – formerly MicroStrategy – the company sold 32 Bitcoin between May 26 and May 31 to fund preferred stock dividends. It is a trivial amount relative to its hoard of 843,706 coins, but the symbolism is potent: it marks the firm’s first Bitcoin sale since 2022. Strategy now sits on unrealized losses of over $12.7 billion.

Where does Bitcoin go from here? All eyes are on the Federal Reserve’s FOMC meeting on June 16-17. Until then, $55,000 is seen as the next major support level – a zone that last served as a floor in February. On the upside, resistance sits at roughly $61,000. With capital bleeding into AI, on-chain demand evaporating, and rate hike expectations hardening, the burden of proof lies squarely on fresh buyers to step in. Without them, the pressure has nowhere to go but down.

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