Bitcoin collapsed to bear market lows following disclosure of Strategy’s 32 BTC sale, but data shows investors buying the dip. Is the market on the verge of a sharp mean reversion?
Strategy’s sale of 32 BTC kicked off a market-wide correction that resulted in nearly $5 billion in futures market liquidations toward the end of the week and a Bitcoin price correction to $59,500.
BTC spot ETF outflows top $4.33 billion. Source: Galaxy Research / X
“We’ll probably sell some bitcoin to fund a dividend just to inoculate the market, just to send the message that we did it.”
Taken in context, a 32 BTC sell to fund investor dividends and address the “will Strategy sell and what happens if they do” elephant in the room is insignificant. That is especially true compared against the company’s track record of selling BTC — something they only did once in the past 3 years — and the overall size of their 843,706 BTC corporate treasury.
“Capital markets are funding the AI buildout at historic scale: ~$400B over 6 months. Bitcoin ETFs have seen ~$4B of outflows since May 14, pressuring BTC. This is a capital rotation, not a Bitcoin impairment. Volatility creates opportunity.”
As rumors swirled and crypto analysts predicted a Terra-Luna-style implosion for Strategy, Bitcoin’s price dropped 23% to a year-to-date low of $59,500. Adding insult to injury, on June 2, Mt. Gox moved 10,422 BTC, worth $739 million, to new wallets. It marked the exchange’s biggest transfer in months, ahead of its scheduled October 2026 repayment deadline.
The abrupt return to range lows pushed a handful of indicators to record extremes. This highlights investors’ dismal sentiment, but also pinpoints Bitcoin’s current undervaluation.
Opportunity Emerges From Chaos
Prices may be dismal but data provides hope and tends to reward conviction.
“This week marks the 200th time (exactly, I counted) since 2015 that Bitcoin has fallen -22% or more in 25 days. It is a regular occurrence, happens about every 3 weeks.”
Bitcoin’s rarely oversold weekly relative strength index (RSI) also suggests that BTC is trading at a discount. Independent market analyst Scott Melker suggested that the conditions for a market bottom are present.
Bitcoin oversold weekly RSI contrasted against BTC halvings. Source: Scott Melker / X
“The bottoms marked on the chart occurred roughly 777, 889, and 924 days after their respective halving events. Today, we’re approximately 770 days removed from the April 2024 halving, placing us directly within the historical window where prior cycles began exhausting themselves.”
Bitcoin halving trends visualized. Source: apsk32 / X
If history were to repeat itself, Bitcoin’s price may be primed for at least another 15% to 20% drop from current levels. That could be followed by a multi-month consolidation period where the price remains either flat or rangebound.
Read more: Michael Saylor’s Next Big Bitcoin Bet Is Strategy’s STRC
Spot Market Activity Shows Dolphins, Shrimps, Sharks and Long-term Holders Buying
Two weeks of spot ETF outflows translated to rising Bitcoin inflows to centralized crypto exchanges and selling in the spot markets. This consequently added pressure to perpetual futures markets, where leveraged positions are closed by option or force.
Despite this, aggregate exchange order book data does show traders stepping in to buy throughout the sell-off.
BTC/USDT bid-ask ratio (10% depth) turns positive. Source: Hyblock
Hyblock’s bid-ask ratio metric (set to 10% aggregate order book depth) highlights an accelerating bid on Bitcoin, suggesting traders see sub-$75,000 BTC as discounted.
BTC/USD’s spot cumulative volume delta by cohort at Coinbase further reinforces the view that smaller-sized traders (0 to 1K order size in USD) are increasing their Bitcoin positioning. Meanwhile, the institutional-size capital flows (100K+ order size in USD) are net sellers (ETF redemptions).
Bitcoin spot CVD flows by cohort size. Coinbase, BTC/USD. Source: Hyblock
The current spot buying previously acted as a cushion near Bitcoin’s key support levels of $74,000 and $70,000. But with each level broken by billion-dollar ETF outflows and futures liquidations, the recent spot accumulation has failed to stem the bleeding across the market. Bitcoin price may be discounted, but lagging capital inflows highlight traders’ reluctance to return to crypto markets.
“What we need to get people interested in crypto and Bitcoin again is probably some of the air coming out of the AI trade.”
On The Radar
- Charles Schwab’s plan to roll out direct spot crypto trading for advisors in 2027 proves the infrastructure buildout continues and the pace of TradFi crypto adoption is steady. When will prices react?
- Several historical Bitcoin bottom signals have emerged. At what point will traders see the risk-to-reward ratio as irresistible?
- The gap between Bitcoin’s 1+ year performance versus Nasdaq, SPX, tech stocks and AI-connected stocks continues to expand. What would trigger a capital rotation and when might it happen? Possibly after the SpaceX, OpenAI and Anthropic IPOs?
- Analysts say Bitcoin’s fair value is $134,000. When will TradFi and retail investors start buying this discount in size?
- -Odds of the CLARITY Act seeing a floor vote in July continue to fluctuate. Will traders position as odds improve, then sell the news if the vote is tabled and passes in the US Senate?
Read more: SpaceX’s IPO Is Coming, and Crypto Traders Are Already Betting on It
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