Bitcoin's 50% Drop Is Its Shallowest Bear Market as AI IPOs Drain $1.7B From ETFs

Bitcoin News

Bitcoin is now navigating the shallowest bear market in its history, sitting roughly 50% below October 2025's all-time high of $126,080. That contrasts sharply with prior cycles, where drawdowns exceeded 90% in 2012 before compressing to 82% and 74% through 2022. Analysts attribute the muted volatility to Bitcoin's maturation into an institutionalized macro asset, backed by exchange-traded products, deeper liquidity and a wider base of long-term allocators. Still, market strategists warn that a 50% reset does not confirm a bottom, pointing to persistent capital outflows and tightening macro conditions as evidence the cycle's floor may not yet be in.

A looming wave of artificial-intelligence mega-listings is emerging as Bitcoin's next liquidity test. OpenAI has confidentially filed an S-1 with the SEC, targeting a public debut as early as September at a valuation between $852 billion and $1 trillion. The filing sits inside a forecast pipeline of up to $160 billion in 2026 US IPO proceeds, with SpaceX eyeing a $75 billion raise at a $1.75 trillion valuation and Anthropic filing after a $965 billion round. Combined, those listings could absorb up to four times the entire 2025 IPO market — drawing on the same institutional capital that previously fueled the ETF cycle propelling BTC toward record highs.

Strategy reinforced its accumulation thesis, disclosing the purchase of 1,550 BTC for roughly $101 million during the week ended June 7, funded through about $181 million raised under its at-the-market equity program. The acquisition lifts total holdings to 845,256 BTC, with roughly $26 billion of ATM capacity still available. Analysts at TD Cowen characterized the firm as a disciplined net accumulator and maintained a $400 stock price target, framing a small 32 BTC disposal last week as an economically insignificant, likely tax-related move rather than a strategic pivot away from long-term Bitcoin holdings.

The drain on spot Bitcoin ETF products underscores the rotation thesis. US-listed funds shed more than $1.7 billion in the first week of June alone, extending a prior $4.4 billion exit across a 13-session streak. The standout came on May 28, when BlackRock's IBIT logged its second-largest single-day withdrawal at roughly $528 million. Flow analysis points to concentrated institutional rebalancing, with allocators steering capital toward AI and semiconductor equities making fresh highs. Since May 18, only one session — June 4 — registered net inflows, illustrating how weak the passive bid supporting Bitcoin has become through the recent decline.

Digital-asset equities staged a sharp rebound on Monday even as Bitcoin softened. Galaxy Digital and custodian BitGo led the recovery, climbing 22% and 18% respectively, while Coinbase advanced 6.4% and Ethereum treasury firm Bitmine gained 7.7%. Strategy's common stock rose more than 6%, and its STRC preferred shares bounced back above $97 toward par value. The market welcomed news that the firm is lifting its cash buffer to $1 billion and approving bi-monthly STRC dividends. Broader risk appetite improved alongside, with the Nasdaq 100 and S&P 500 adding 2.4% and 1% respectively during the session.

Smaller treasury players also stepped in, with Strive acquiring 32 Bitcoin — precisely matching the amount Strategy offloaded the week prior. The broader rotation, however, remains stark: AI and semiconductor stocks surged roughly 170% over the past year while Bitcoin fell about 40% across the same span. On June 3, the Philadelphia Semiconductor Index jumped 5.9% as BTC slipped around 4%, an intraday split highlighting institutional flow toward chips and AI. Strategists flag $60,000 as a near-term battleground, with the $55,000 to $45,000 zone in focus should selling pressure persist through the coming weeks.

Bitcoin trades near $62,575, down about 1.57% over 24 hours and locked in a confirmed downtrend. Immediate support sits at $61,800, with deeper cushions at $59,131 and $52,679, while reclaiming $64,203 is the first hurdle before $66,611 and $68,192 resistance. The RSI at 25.52 signals deeply oversold conditions, raising the odds of a relief bounce, yet the MACD remains bearish, confirming dominant downside momentum. A hold above $61,800 keeps a recovery toward $64,203 viable; a decisive close below $59,131 would invalidate the bullish case and open the path toward the $52,679 region.