Bitcoin Drops to 21-Month Low Before Quarterly Futures and Options Expiry

Bitcoin News

Bitcoin (BTC) fell to its lowest level in roughly 21 months late on June 25, sliding to depths unseen since September 2024 as traders braced for a major quarterly expiry. June 26 marks a so-called major SQ session, when quarterly futures settlement and major options exercise dates coincide — an event that routinely amplifies volatility. Position adjustments accelerated into the deadline, leaving Bitcoin price action choppy. Several headwinds converged at once: easing geopolitical tension around the Strait of Hormuz dulled safe-haven demand, the stalled US CLARITY Act stoked regulatory uncertainty, and a declining mining hashrate added pressure. The combination dragged Bitcoin through technical support into fresh multi-month lows.

The slide triggered one of the heaviest deleveraging events in weeks. Derivatives data show roughly $889.84 million in crypto positions were liquidated over 24 hours, with long positions accounting for about $694.63 million, or 78% of the total, as some 131,727 traders were wiped out. Bitcoin led the damage, registering $342.79 million in long liquidations against $93.14 million in shorts, while Ethereum saw $156.72 million in long liquidations and XRP and Solana added smaller cascades. The lopsided ratio underscores how heavily traders were positioned for a rebound that never materialized, leaving forced selling to accelerate the decline through a deepening bear market stretch.

Bitcoin's options market is now pricing downside protection at historically rich levels. A research analysis spanning three venues — Deribit, BlackRock's iShares Bitcoin Trust (IBIT), and Strategy (MSTR) — found traders paying steeper premiums to hedge declines than to chase gains, a stance ranking among the most defensive of the past five years. On IBIT, downside protection has outweighed upside positioning on more than three-quarters of trading days, and the gap between crypto-native and institutional caution has narrowed to near zero. The structural inability to trade the ETF around the clock, analysts note, pushes holders to over-insure against overnight moves, reinforcing the persistent skew toward put protection.

Exchange-balance data offers a more nuanced read on flows. On-chain figures show major exchanges held roughly 2,475,109 BTC as of late June 26, with a net inflow of about 656 BTC over the prior day — a short-term reversal even as the trailing week logged 8,827 BTC in net outflows. Coinbase Pro remained the largest custodian at 850,743 BTC despite a daily outflow of 471 BTC, while Binance added 561 BTC and Bitfinex absorbed 1,124 BTC. Geographically, the European session dominated turnover, with Binance BTCUSDT volume reaching $1.24 billion versus $399 million in Asia and $274 million during US hours, signaling where the heaviest selling pressure originated.

Despite the rout, the options market is not yet pricing a crisis at Strategy, the largest corporate Bitcoin holder with 847,363 BTC. The company's perpetual preferred shares (STRC) fell to $82.53 on June 22 — about 17% below their $100 par — before partially recovering after Strategy disclosed it had built its cash reserves to $1.3 billion. While the cost of hedging MSTR downside has risen, it remains well below the peaks seen during the April 2025 and early-2026 selloffs. Tail-risk indicators tracking extreme crash scenarios stay subdued, suggesting the market sees stress but not forced capitulation at the treasury firm — hedging without outright dumping.

Attention is now shifting to the next liquidation pockets below spot. Liquidation-map data show the nearest dense liquidity sits beneath the market rather than above it: a first cluster around $59,000, followed by a thicker band between $58,800 and $58,500 where stop-driven selling and forced liquidations could compound. Reaching the upside short-liquidation zone near $60,500 would require a 2-5% rebound, whereas the downside long pockets sit barely 1% away. That asymmetry leads many to expect a test of the $58,500 region before any squeeze higher, though macro data and spot demand can still override what the heatmap implies.

Our reading of COINOTAG's proprietary 42-indicator composite S/R scoring engine frames the immediate battle around $58,084, rated a strong 88/100 support on the confluence of the Fibonacci 0.000 retracement, the previous day's low, and the lower Donchian band. To the upside, the engine scores the $60,997 resistance at 76/100, anchored by the upper ATR band and HVN 2, with heavier supply at $70,507 (69/100). Derivatives data show a near-flat 0.0001% funding rate and $11.67 billion in open interest, yet a 2.45 long/short ratio (71% long) signals crowded longs vulnerable to further flushes. With RSI at 28 and the Fear & Greed Index at 13 (Extreme Fear), a daily close below $58,084 would invalidate the bullish case; reclaiming $60,997 is the first bullish trigger.