BIT Weekly Market Watch: Halved from Highs, Doubled in Panic – $60K as the Sole Lifeline

Six major bearish factors have fermented simultaneously and amplified each other, rather than having independent impacts. Early Monday morning, Bitcoin fell from $73,396, hitting an intraday low of $61,351 on Thursday, the lowest since February, nearly halving from its all-time high of $126,210.50 in October 2025. Ethereum led this downturn, plunging 16% in a single week to around $1,683. After the coin price approached $60,000 (the largest bearish support barrier on the entire options market), both major cryptocurrencies experienced a modest 24-hour rebound: Bitcoin futures rose 2.75%, and Ethereum bounced back 5.71%. While market panic has not completely dissipated, risks can now be priced and hedged via instruments.

Six Overlapping Risks Trigger Deep Correction

Direct Catalyst: MicroStrategy Sells Bitcoin for the First Time in Over Two Years

MicroStrategy sold Bitcoin for the first time since December 2022, disposing of 32 coins (total value of approximately $2.5 million, average transaction price of $77,135) to fund preferred stock dividends. The amount sold accounts for only 0.004% of its total holdings of 843,706 coins, and the sale price was above its cost basis, resulting in a profitable exit.

The actual selling pressure was negligible, but the symbolic impact was immense: Saylor has long adhered to the core belief of only buying and never selling Bitcoin. The breach of this belief caused market panic to spread rapidly—even the most steadfast institutional giant began reducing its position. Over the following week, whales cumulatively sold approximately 25,000 Bitcoins, and retail panic selling further exacerbated the decline. When the Bitcoin price fell to $63,083, MicroStrategy's overall holdings fell into unrealized losses, with its average holding cost of $75,699 resulting in a paper loss of over $10,000 per coin.

ETF Outflows Exacerbate Market Weakness

From May 15 to June 3, spot Bitcoin ETFs experienced net outflows for 13 consecutive trading days, setting the longest outflow streak since the product launched in January 2024, with total capital flight of approximately $4.4 billion. Over the three weeks, the total AUM of ETFs shrank from $104.29 billion to $82.83 billion.

BlackRock's IBIT accounted for 75% of the total outflows, reaching $3.3 billion; Fidelity's FBTC saw outflows of $456 million, and Grayscale's GBTC had outflows of $303 million. The outflow trend paused on June 4, with a small net inflow of $3.05 million, but this was merely a temporary halt, not a trend reversal. Bloomberg analyst Eric Balchunas stated that the persistent outflows have turned the cumulative year-to-date capital flow for 2026 negative, although the overall cumulative net inflow since the product's launch remains positive at approximately $55 billion.

Four Other Macro and Geopolitical Risks Amplify the Decline

1. Large wallet transfers by the Mt. Gox exchange have once again sparked market sell-off concerns.
2. The macro environment remains persistently bearish: inflation stickiness exceeded expectations, significantly dampening market rate-cut expectations (Polymarket shows a 66% probability of zero rate cuts in 2026), a strengthening US dollar, and rising US Treasury yields. Capital continues to flow into AI and tech sectors, with US stocks hitting new highs this week, diverging sharply from cryptocurrency trends.
3. On June 5, Hezbollah rejected Israel's ceasefire proposal, increasing geopolitical uncertainty in the Middle East, compounded by unresolved US-Iran tensions.
4. A single factor is unlikely to severely suppress coin prices. In an environment entirely lacking bullish catalysts, multiple bearish forces combined to trigger a deep correction.

Derivatives Data Signals and Core Interpretation

Implied Volatility (IV) Rises from Second Bottom, Showing a Top Signal

During the second dip to lower levels, implied volatility surged again. The at-the-money near-month option IV for Bitcoin on June 26 rose to 47.47% (up 4.14 percentage points), while Ethereum's near-month IV skyrocketed to 64.38% (up 10.68 percentage points, showing volatility elasticity approximately 2.6 times that of Bitcoin). On June 9, the near-term short-term IV for contracts briefly touched 65.82% for Bitcoin and 83.50% for Ethereum.

During the session, the Bitcoin DVOL volatility index spiked to 55 but closed lower at 48.06, falling 2.65% intraday. Ethereum's DVOL closed at 66.31, edging down 1.34% intraday. Both volatility indices maintained high levels while turning downwards simultaneously, a classic signal of a temporary IV peak: the market frantically bought short-term put protection at the lows, then partially unwound positions to relieve pressure.

Implied Skew Curve Shows Key Divergence Structure

The clearest data indicator this week is the skew term structure:

The near-term market is filled with extreme bearish panic. On June 9, the near-term effective Skew for Bitcoin was -17.96, and for Ethereum -19.58. The 10Delta deep out-of-the-money put skew deteriorated even more markedly, reaching -33.35 and -40.61 respectively. As prices neared the $60,000 level, the market was willing to pay extremely high premiums for short-term downside protection.

The long-term curve showed clear repair, turning positive: Bitcoin's forward Skew for September, December, and March next year turned positive (an increase of +0.77 to +1.83 percentage points). Ethereum's forward Skew also turned positive after August. The curve shifted from last week's deeply bearish across all tenors to a steep structure characterized by "near-term deep panic, long-term pricing recovery."

This is a standard diverging pattern in the middle of a decline: Short-term panic dominates the market, but long-term derivatives have already begun pricing in market stabilization over the next 3 to 6 months. Impact on structured product execution: The cost of long-term downside protection is declining, significantly improving the risk-reward ratio for constructing long-protection-period structures like Collars and Bullish Seagulls.

Institutional Block Trades Completely Reverse, Shifting from Defensive Hedging to Buying the Dip

Last week, institutions were in defense mode, with put buying accounting for 33.3% of trades. This week, the direction has completely reversed:

The proportion of block put selling surged to 42.0% (up 14.1 percentage points month-over-month), and call buying rose to 33.0% (up 24 percentage points). Put buying halved to 17.3%, while call selling fell to 7.6%. Retail operations mirrored this trend, with retail put selling ranking first at 30.1%.

Institutions have shifted from actively buying protection to selling protection and positioning for bottoms at lower levels—primarily selling large volumes of PUTs and buying CALLs near the $60,000 put barrier. Combined trade data corroborates this trend: 44.2% of institutional Bitcoin block trades were put spread strategies (selling near-term PUTs, buying deeper OTM PUTs to cap maximum downside loss). Essentially, this involves collecting premiums at the $60,000 level while establishing a bottom position with controlled risk.

Perpetual funding rates for Bitcoin and Ethereum remained neutral throughout the period (BTC 0.000%, ETH -0.006%), indicating orderly deleveraging in the market rather than chain liquidations, with clear differentiation in risk levels.

Bullish, Bearish, and Neutral Comprehensive Assessment

Bullish Logic

1. Panic has shown structural boundaries: The massive put open interest barrier at $60,000 (approximately 19,000 contracts, the highest on the entire board) has attracted genuine institutional capital. Institutions selling PUTs and buying CALLs at this level is essentially using options to bottom-fish—collecting premiums, committing to buy at $60,000, while simultaneously buying calls to capture any rebound.
2. The Fear and Greed Index has fallen to cyclical lows. Historically, this level often precedes a rebound (not a direct cause, but a necessary condition). Long-term holders have not engaged in widespread panic selling; the current selling pressure comes from whale short-term de-risking and ETF outflows, not long-term holders capitulating. Exchange inventory remains at low levels.
3. The 13-day consecutive ETF outflow streak has paused. Key bullish development: MicroStrategy announced reserving $1 billion in cash for preferred stock dividends, completely severing the link between dividend payments and Bitcoin sales. The sale of 32 coins was a one-time confidence shake, not a regular source of selling pressure.
4. Forward Skew has repaired, with the derivatives market pricing in stabilization over 3–6 months. If spot prices hold the $60,000 level and the US CPI data on June 10 shows no unexpected upward surprises, all technical conditions for stabilization will be met.

Bearish Downside Risks

1. The second bottoming process is not confirmed. The current price of $63,083 still has a 4.9% downside to the $60,000 put barrier; if broken, gamma effects and the magnetic pull of the put barrier could accelerate the decline. The next major put support levels are $55,000 (10,800 contracts) and $50,000 (12,500 contracts).
2. Ethereum's selling pressure exceeds Bitcoin's: Ethereum's forward futures have shifted from a premium of 6.52% last week to a deep backwardation of -9.49%, with slightly negative perpetual funding rates. The ETH/BTC near-month volatility ratio of 1.356 hit a cyclical high, indicating Ethereum has greater downside elasticity and weaker performance.
3. MicroStrategy's semi-monthly dividend distribution mechanism is now in place, creating ongoing minor, regular Bitcoin selling pressure.
4. The US CPI on June 10 and the FOMC meeting on June 16-17 (Warsh's first with the dot plot) are two major macro catalysts that could sway the market at any time. Before the $60,000 support is confirmed, moving aggressively to buy the dip prematurely could lead to deeper drawdowns.

Neutral Comprehensive Assessment

The panic-driven market has reached an identifiable structural node. The $60,000 level is the single most critical price point for the current market—not just a psychological round number, but the core node concentrating the largest option open interest, institutional bottom-fishing capital, and the binary dividing line for market bulls and bears. Holding above this level provides a basis for stabilization; breaching it would direct attention to the next gamma cluster at $55,000.

The institutional shift from defense to buying is the most critical signal in the entire dataset. However, the proportion of block trade volume has fallen from 46.3% to 16.3%. While the directional judgment is correct, overall confidence to enter is not fully committed. The strategy should be to deploy capital in batches. The market has only two potential paths: stabilize above $60,000, or break below it. All subsequent developments are determined by this outcome.

BIT Practical Views

Prioritize Collar Structures as the Primary Hedging Tool This Week

The core purpose is not to chase high yields, but for asset risk control. The repaired forward Skew has lowered the cost of long-term downside protection, while high short-term IV enhances the yield from selling calls, creating the best entry window for Collar structures in weeks. The market still holds the potential to test and break below $60,000. Before the two major catalysts—CPI (June 10) and FOMC (June 16-17)—reprice the market, setting up no-margin-call Collar combinations can pre-lock the maximum downside loss. There is no need to wait for market clarity; the core value of the Collar strategy is to control risk effectively without needing a precise directional view.

Deploy Dip-Buying in Batches Near the $60,000 Level

At the current price of $63,000 combined with high volatility, the premium income from selling PUTs is at a cyclical high, suitable for three types of structured products: Fixed Coupon Notes (FCN), Low-Price Dual Currency Products (DCP), and Discount Accumulators. The Bullish Seagull structure is also suitable: deploying USDT principal, setting the conversion price at $60,000 or lower. If the coin price tests the put barrier, it allows for coin accumulation at an even lower average cost, capturing a high standard annualized return upon market recovery.

Institutions are already selling PUTs at the $60,000 level to accumulate positions. The tiered returns of the Bullish Seagull perfectly mirror this 'smart money' approach: holding notes and collecting yields while waiting, with built-in lower average entry prices. Strictly control single position size to leave room for further downside. Only increase position size after the price firmly stabilizes above $60,000.

Volatility Sellers Can Test the Waters Gradually, But Not Suitable for Heavy Positioning Yet

The IV top signal is valid: the DVOL intraday decline, the extreme near-term Skew values that historically revert to the mean quickly, and the large-scale put selling by institutions. Particularly for Ethereum, the yield from selling volatility is at a cyclical peak.

However, signs of a peak do not confirm the top; actual volatility could still surge again. Naked short volatility or direct gamma exposure betting on the $60,000 support, CPI, or FOMC meetings is pure speculation. Align with the prudent institutional approach: sell PUTs via spread structures (selling near-term PUTs, buying deeper OTM PUTs to cap maximum loss) with small position sizes. Only after spot prices firmly hold $60,000 and DVOL declines persistently can volatility short positions be scaled up.

For Holders Planning to Reduce Positions and Take Profits: Current Price Level is Not Suitable for Large-Scale Selling

After a deep correction, the viable execution prices for high-price reduction structures (Decreasing Accumulators, Bearish FCNs, High-Price DCPs) have moved significantly lower. Panic selling at the $63,000 level would only magnify actual paper losses. Only after a recovery rally to the former support-turned-resistance level of $72,000, or near the $80,000 call barrier, should reduction structures be deployed in batches. The optimal strategy now: hold core positions paired with protective hedges.

Summary

Six bearish factors simultaneously resonated and impacted the market. After digesting the associated risks, the market has formed a substantial option support barrier at the $60,000 level.

Operational priority: First, establish Collar risk control; second, accumulate long positions in batches near the $60,000 level; third, only deploy large-scale volatility selling for arbitrage after the bottom is confirmed stable.