Bitcoin Plunges to $67K as Strategy Sells 32 BTC, $176B Wiped, ETFs Lose $2.1B

Bitcoin News

Strategy's first Bitcoin sale since 2022 triggered an unexpected pivot in capital flows, with Ethereum recording one of its sharpest daily outperformance moves against BTC since 2024. Geoff Kendrick, head of digital asset research at Standard Chartered, argued in a Tuesday note that the $2.5 million liquidation marked a structural turning point for the second-largest digital asset. Since the start of 2024, Ethereum has registered better daily gains relative to Bitcoin during a Bitcoin drawdown only 23 times. Kendrick projects the ETH/BTC ratio could weaken Bitcoin dominance toward 0.04 by year-end, implying a roughly 41% rally in Ethereum from $1,900 toward $2,700.

The trigger for that thesis was Strategy's disclosure that it offloaded 32 BTC between May 26 and May 31 at an average price of $77,135. The roughly $2.5 million sale, detailed in a Form 8-K filing, funded preferred stock distributions and marked the corporate treasury's first reduction since 2022. Despite the move, the firm still holds 843,706 BTC valued north of $60 billion at an average cost basis of $75,699. The disposed coins represent 0.004% of total reserves, a fraction so small it would carry no weight if not for Michael Saylor's longstanding never-sell narrative anchoring the company's brand identity.

That symbolic crack widened a sharp divide within the maximalist camp. Defenders frame the disposal as disciplined treasury management, a routine tool to honor preferred dividend obligations without diluting equity. Critics see something heavier. Jeff Dorman, chief investment officer at Arca, labeled the move complete balance sheet mismanagement, while several on-chain analysts called it the first visible structural cascade in a corporate model built on perpetual accumulation. The debate now centers on whether Strategy functions as a pure Bitcoin proxy or as a leveraged public company juggling real financial obligations. The 32-coin sale, however immaterial in size, tests that framing for the first time in years.

The broader market backdrop made the disposal especially jarring and accelerated fears of an extended bear market. Roughly $176 billion in total crypto market capitalization evaporated in 48 hours as Bitcoin sliced through the $67,000 support for the first time in two months. The cascade forced $1.5 billion in long liquidations and snapped a two-month correlation between Bitcoin and the Russell 2000 small-cap index that had quietly defined the previous risk regime. US equities continued to grind higher even as digital assets bled, leaving traders searching for a coherent narrative beyond the obvious leverage flush and confirming that crypto-specific catalysts now outweigh the broader risk-on backdrop.

Capital flight from regulated wrappers compounded the pressure. Spot Bitcoin ETF products absorbed roughly $2.1 billion in net outflows between May 12 and May 20, a sustained eight-day withdrawal sequence that drained institutional ballast precisely as derivatives markets weakened. The annualized two-month futures basis has now held below the 4% neutral threshold for more than three months, confirming a structural absence of bullish leverage demand. Read together, the ETF flows and futures curve suggest professional desks are de-risking rather than buying the dip, a stance that historically precedes deeper corrections rather than V-shaped recoveries on regulated exchange venues.

Macro and sector rotation narratives are sharpening the bearish thesis. Capital has visibly migrated into artificial-intelligence equities, with semiconductor and hyperscaler names absorbing flows that previously cycled into digital assets. At the same time, sticky inflation prints have revived speculation that the Federal Reserve could be forced into a hawkish pivot rather than the rate cuts markets priced earlier in the year. Higher-for-longer policy expectations are weighing on duration-sensitive risk assets, and Bitcoin's recent behavior aligns with that repricing. Strategy's pause on weekly accumulation alongside its convertible-debt buyback only reinforces the perception that the marginal corporate bid is thinning.

On the chart, BTC trades near $66,896, down nearly 6% on the day with an RSI of 23.07 confirming deeply oversold conditions and a MACD that remains bearish. Immediate support sits at $66,863, with secondary levels at $65,500 and $62,510. Reclaiming $68,484 would be the first sign of stabilization, while $70,280 and $72,673 frame the upper resistance band well below the prior all-time high. A daily close back above $68,500 paired with RSI lifting above 35 would invalidate the breakdown thesis. Conversely, a decisive break of $65,500 on rising volume opens the door toward the $62,500 zone.