Bitcoin briefly fell below $66,000 late Tuesday before slightly rebounding, while Ethereum and other major cryptocurrencies also declined, as traders continue to digest Strategy's recent bitcoin sale alongside broader geopolitical uncertainty.
The world's largest cryptocurrency (BTC) dropped to a low of around $65,700 Tuesday night before rebounding slightly to $66,460 as of 1:00 a.m. ET Wednesday, according to The Block's BTC price page.
Ethereum (ETH) slipped 7.1% to $1,849, while BNB lost 7.2% to trade at $635. XRP fell 4.8%, and Solana declined 7.7%.
Meanwhile, U.S. spot bitcoin exchange-traded funds recorded $519.2 million in net outflows on Tuesday, extending their negative flow streak to 12 consecutive days, according to SoSoValue data. Spot Ethereum ETFs also posted $90.2 million in net outflows, marking their 16th straight day of outflows.
Dominick John, an analyst of Zeus Research, told The Block that the crypto decline was mainly driven by heavy institutional exchange-traded funds outflows, aggressive long liquidations, and broader macro de-risking that reduced liquidity across the crypto market.
"Forced unwinds in leveraged positions accelerated downside pressure within the major assets," said John.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, also said that fresh airstrikes in the Middle East pushed oil prices higher and intensified risk-off sentiment, "sparking massive long liquidations, accelerating ETF outflows, and exposing BTC's high-beta risk-asset behavior over safe-haven traits."
Notably, WTI crude futures rose 1.13% to $94.82, while Brent crude climbed 1.04% to $97.07 per barrel.
Asian equities traded mixed on Wednesday. Japan's Nikkei 225 rose 2.95% during intraday trading to hit a record high, with markets still open. China's CSI 300 gained 1.13%, while Hong Kong's Hang Seng index fell 1.56%.
Strategy's recent BTC sale
Beyond geopolitical concerns, Peter Chung, head of research at Presto Research, said that the crypto market continues to digest Strategy's recent bitcoin sale.
The Michael Saylor-led firm disclosed Monday that it sold 32 BTC for roughly $2.5 million between May 26 and May 31, marking its first bitcoin sale since December 2022.
Strategy's Nasdaq-listed shares (MSTR) dropped 9.15% to close at $136.08 on Tuesday, with the stock down about 23% over the past month.
"Those searching for a BTC-specific narrative to explain its 24-hour underperformance will inevitably point to MSTR's sale of 32 BTC," said Chung.
Whether the relatively small sale — which Saylor described as an "inoculation" — turns out to be a smart defensive move or "the straw that breaks the camel's back" will depend on how the market contextualizes it, according to Chung.
"[It] is unclear whether this alone explains BTC's underperformance," Chung added. "The decoupling started a couple of weeks earlier, most likely driven by selling pressure to fund rotational buying into Al-themed equities."
Looking ahead, John of Zeus said the downward pressure on crypto markets could persist through June, while Adziima noted that the pressure may ease within days to one or two weeks "once headlines cool or de-escalation hints emerge."
"Event-driven dips in this cycle have rebounded fast," Adziima added.