HTX Research｜Macro Research Report on the Crypto Market: Extreme Stress Test Under the Resonance of Multiple Factors

1. Geopolitics and Macro Liquidity: The First Major Market Test of the Warsh Era

On May 22, Kevin Warsh was officially confirmed as the 11th Chair of the Federal Reserve by a 54:45 vote, succeeding Powell whose term had expired. The former Fed Governor from the 2008 financial crisis era immediately sent a clear hawkish signal upon taking office, publicly criticizing the 2020-2022 monetary policy as "one of the most severe policy misjudgments since the Volcker era," explicitly prioritizing an accelerated pace of balance sheet reduction. CME FedWatch data shows that as of June 17, the probability of an FOMC rate cut has plummeted from 55% in April to 23%, with the probability of no rate cuts for the entire year surging to 65%. The federal funds rate is anchored in the 3.50%-3.75% range, and the 10-year Treasury yield has consistently traded in the 4.35%-4.55% range throughout May, exerting continuous pressure on risk asset valuations.

More critically, U.S. inflation persistence has far exceeded expectations. Headline CPI has rebounded to 3.8% year-over-year, while core inflation remains well above the 2% policy target. Warsh made it clear during his confirmation hearing that policy focus would center on inflation resilience rather than marginal softening in the labor market. Even if this Friday's May nonfarm payrolls data proves unexpectedly weak, the Fed is unlikely to pivot toward easing. Against this backdrop, the external liquidity environment for the crypto market is escalating from "moderate headwinds" to "significant headwinds." Compounding this, threats from Iran to close the Strait of Hormuz sent oil prices surging nearly 6% in a single day—WTI crude touched $92.54, and Brent crude rose to $94.98—further compressing the scope for rate cuts by increasing energy costs. In this first major market test of the Warsh era, cryptoassets face a quadruple whammy of persistently high interest rates, accelerated quantitative tightening, stubborn inflation, and elevated geopolitical risk premiums.

However, from a longer-term cyclical perspective, the current macroeconomic predicament is not without solutions. The June 16-17 FOMC meeting will publish updated dot plots including the interest rate path through 2028. If the median projection is downgraded from "one rate cut" to "no rate cuts for the full year," short-term market volatility could be severe, but once the expected deviation is fully priced in, macroeconomic uncertainty may actually dissipate for a period. For the crypto market, a transition from "high uncertainty" to "certain tightening" is bearish in the short term, but over the medium-to-long term, it could facilitate capital reallocation under a clearer interest rate framework. Historically, the final rate hike in the 2018 tightening cycle actually triggered a phased rebound in risk assets—an experience worth noting.

2. The Signal of ETF Flows: Is $3.5 Billion in Outflows a Retreat or a Portfolio Rebalance?

The most direct liquidity pressure driving this downturn comes from spot ETFs. As of June 2, U.S. spot BTC ETFs have experienced net outflows for 11 consecutive trading days, totaling approximately $3.5 billion, setting a new record for the longest continuous outflow streak since their launch in January 2024. Over three weeks, BTC ETFs saw cumulative net outflows exceeding $4.21 billion, with AUM declining from $104 billion to $94 billion. ETH ETFs recorded concurrent net outflows of no less than $241 million, accumulating over $712 million in three weeks. More strikingly, the year-to-date net inflow for 2026 has turned negative for the first time—the ETF engine, the most powerful buying force since 2024, has officially stalled and reversed.

However, a deeper analysis of the structural characteristics of these ETF outflows reveals a more nuanced picture than the headline numbers suggest. CoinShares and Galaxy attribute this wave of outflows to three categories of factors: geopolitical tensions (Iran-U.S. conflict), capital rotation from crypto to AI and semiconductors (NVDA's share price surged over 6% in a single day following the Computex launch of RTX Spark, while Marvell surged over 12% pre-market after Jensen Huang's endorsement), and diminished momentum from Strategy's new purchases. Notably, the number of ETF shares outstanding has not declined in tandem—suggesting institutions are engaging in "tactical reduction" rather than "full liquidation." Although BlackRock's IBIT once saw a single-day outflow of $528 million, its AUM remains the largest, and BlackRock's CEO recently publicly stated that "Bitcoin could reach $700,000 per coin," indicating that institutional long-term strategic convictions remain intact.

Looking at historical patterns, sharp short-term fluctuations in ETF flows are not unique to crypto. In April 2024, BTC ETFs also experienced continuous outflows of about $1.2 billion, yet Bitcoin rebounded from its lows to new highs within three months. The current $3.5 billion outflow is eye-catching in absolute terms, but it represents only about 3.7% of the total $94 billion AUM of BTC ETFs. A recent research report from Standard Chartered maintains a long-term optimistic outlook for digital assets, predicting that Ethereum could reach $40,000 by 2030. Taken together, the current ETF outflows are more likely a "tactical portfolio rebalancing" than a "strategic retreat." Once capital rotates into AI themes and valuations fully reflect expectations, and after crypto has undergone sufficient adjustment, the impetus for capital to flow back remains.

3. Internal Structural Contradictions: Fundamentals Rising, Prices Falling

If one only looks at on-chain data, the fundamentals of the crypto market have never been stronger. Bitcoin's network hash rate reached an all-time high in 2026, driven by new-generation ASIC miners offering greater efficiency and the continued expansion of institutionalized mining. Simultaneously, the total stablecoin market cap reached $325.4 billion ($187.9 billion for USDT, $75.9 billion for USDC), growing 37.9% since April 2025. Hash rate represents long-term confidence in the underlying infrastructure, while stablecoin market cap reflects the abundance of on-chain liquidity. Both are at historic peaks, starkly diverging from Bitcoin's 34% decline from its highs.

The causes of this "decoupling of fundamentals and prices" are multifaceted. First, Bitcoin's short-term price discovery has shifted from on-chain investors to macro traders. The 90-day rolling correlation between BTC and the Nasdaq remains in the 0.6-0.7 range, with the "high-beta tech stock" narrative far outweighing the "digital gold" narrative. This means that when macro capital contracts risk exposure due to rising interest rates, BTC is among the first assets to be reduced. Second, futures leverage has amplified selling pressure—BTC's break below $70,000 triggered a massive wave of long liquidations, with 24-hour market-wide liquidations reaching $1.624 billion, the highest since February. Open interest remains elevated above $52 billion, suggesting the deleveraging process may not be complete. Finally, Ethereum faces structural challenges: Solana continues to erode market share in DeFi and DEX trading volumes, L2 fragmentation complicates ETH's value capture, and ETH ETF inflows lag significantly behind those of BTC ETFs.

However, from a cyclical perspective, this sharp sell-off is occurring precisely against a backdrop of continuously improving network fundamentals. Such "divergences" have appeared repeatedly in crypto history and have often constituted mid-cycle accumulation opportunities. During the 2017 bull run, BTC experienced five corrections exceeding 30%; in 2021, there were three. The current 34% correction is not unusual by historical standards, and BTC still trades over 330% above its 2022 lows. Historically, when markets are in extreme fear (greed and fear index at just 11) while on-chain fundamentals are improving, subsequent 12-month returns have been substantial: +80% after extreme fear in September 2023, +120% after August 2024, and +190% after November 2022. While historical precedent does not guarantee future results, it suggests that maintaining focus on long-term fundamentals during periods of panic can be an important way to identify structural buying opportunities.

4. Strategy's First BTC Sale: A Storm in a Teacup and the Repair of a Narrative Fracture

On June 1, an SEC filing sent a small shockwave through the crypto market. Strategy sold 32 bitcoins between May 26-31 at an average price of approximately $77,135, raising about $2.5 million to pay dividends for its STRC preferred stock. This transaction represents just 0.004% of Strategy's total holdings and an amount that is a fraction of the company's daily stock trading volume—yet it ignited the market due to one key fact: it was Strategy's first net reduction in holdings in 41 months, since August 2022. In the crypto narrative ecosystem, Michael Saylor and his company Strategy have long played the role of the "ultimate HODLer," with the mantra "we will never sell Bitcoin" serving as a foundational pillar of market faith. When the first crack appeared in this pillar, MSTR's stock price plunged 11% in two days, and BTC sharply fell to $64,000.

A calm assessment of this event requires distinguishing between "narrative shock" and "fundamental change." 32 BTC relative to Strategy's total holdings of over 500,000 is like removing a glass of water from the ocean. The purpose was clear—paying preferred stock dividends is a routine corporate treasury operation and has nothing to do with a bearish view on Bitcoin. From a tax planning perspective, a small sale at $77,135 to lock in a tax credit is entirely reasonable. However, the Fear and Greed Index plummeted from 30 to 11 during this downturn, indicating that investor risk perception is in an extremely fragile state. In such an environment, a minor crack in a "symbol of faith" is infinitely amplified by emotional amplifiers, its impact far exceeding the true significance of the event itself.

Over the medium-to-long term, the repair of the Strategy narrative fracture depends on two variables. First, whether Saylor will make a public statement clarifying that this sale was a routine tax planning measure, not a strategic shift. Second, whether Strategy resumes buying in the coming period—if it reappears on the buy side within the next few weeks, the current panic will prove to be a storm in a teacup. From an institutional behavioral perspective, it seems more a function of market sentiment than of fundamentals for a consistent buyer over 41 months to be repriced based on a 0.004% position adjustment. Once risks are sufficiently released and rational investors re-evaluate the event, panic-driven pricing often gets corrected.

5. The CLARITY Act and the Regulatory Inflection Point: The Year's Largest "Unpriced" Catalyst

Amidst the current confluence of negative factors, a potentially significant undervalued positive variable is advancing in Washington D.C. On May 15, the CLARITY Act passed a critical vote in the Senate Banking Committee, advancing to a full Senate floor vote. This bill is considered a "constitutional document" for the U.S. crypto industry regulatory framework—for the first time establishing clear regulatory boundaries for digital assets at the federal level, delineating the jurisdictional authority between the SEC and the CFTC, and providing a comprehensive legal framework for stablecoin issuance, exchange registration, and market structure. The House of Representatives previously passed it by an overwhelming 294-134 margin, demonstrating bipartisan support exceeding expectations. A full Senate vote is highly likely to occur within June.

The strategic significance of the CLARITY Act for the crypto market cannot be overstated. The biggest uncertainty facing the crypto industry today is not technology or demand, but the lack of a clear regulatory framework. As the world's largest capital market, the U.S.'s regulatory ambiguity has long plagued institutional investors—pension funds, endowments, and insurance companies have been cautious in their allocations largely due to the absence of a clear compliance pathway. Once the Act passes, it will fundamentally eliminate this uncertainty: the credibility of spot ETFs as compliant investment vehicles will be further enhanced, attracting conservative institutions that have previously remained on the sidelines; the $325.4 billion stablecoin ecosystem will gain operational legitimacy; and the signal of the U.S. moving from "ambiguous exclusion" to "clear acceptance" will have global spillover effects.

Notably, during the current panic sell-off, the progress of the CLARITY Act appears completely unpriced by the market. Bitcoin's slide from $78,000 to $64,000 shows almost no discount for the bill's advancement. This phenomenon of "policy positives being drowned out by sentiment" is not uncommon during periods of extreme fear, but it also means that once sentiment is repaired and the Act is formally passed, this catalyst will unleash its full incremental effect from a price level that has incorporated virtually no positive expectations. For medium-to-long-term investors, identifying structural positives that have "not yet been priced in" during market panic is a strategy with a historically validated basis. Of course, uncertainties remain regarding the Act's trajectory—opposition from banking lobbying groups to certain provisions, the specific timeline for the full Senate vote, and the President's willingness to sign it all require ongoing monitoring.

6. Conclusion: Identifying the Invariance of Long-Term Narratives Amidst Panic

Surveying the crypto market landscape in early June 2026, we see a complex picture of coexisting "short-term panic and long-term fundamental improvement." From a price perspective: BTC has fallen from $78,000 to $64,000, ETH has broken below $2,000, and the Fear and Greed Index is at 11—all indicators pointing to extreme fear. From a driver perspective: escalating geopolitical tensions, tightening macro conditions, record ETF outflows ($3.5 billion over 11 days), a crack in the faith narrative (Strategy's first BTC sale), and on-chain anomalies (Mt. Gox transferring $739 million) constitute a rare confluence of five negative factors, the density of which is extremely unusual. From a structural perspective: $1.624 billion in 24-hour liquidations and open interest remaining elevated above $52 billion suggest the deleveraging process may not yet be complete.

However, the underlying narratives of the crypto market have not fundamentally changed. Decentralization, digital sovereignty, store of value—the core logic supporting the long-term value of crypto assets held true when BTC was at $100,000 and holds equally true at $64,000. Price fluctuations change short-term sentiment, not the security of the underlying protocols. All-time high network hash rate, a $325.4 billion stablecoin market cap (+37.9% YoY), and the steady progress of the CLARITY Act—these structural improvements are accumulating at a pace imperceptible amidst market panic. History has repeatedly shown that extreme fear zones (Fear & Greed Index < 25) often represent contrarian accumulation opportunities for medium-to-long-term investors, even though historical experience is never a guarantee of future returns.

Looking ahead to the coming months, the trajectory of the crypto market will diverge based on three key variables. Base case (approximately 50% probability): BTC forms a bottom in the $60,000-$68,000 range for 2-4 weeks, then recovers to $70,000-$75,000 after the nonfarm payrolls report and FOMC dot plot are released. Bullish case (approximately 25%): The CLARITY Act passes within June, combined with ETF inflows resuming and geopolitical de-escalation, leading to a V-shaped rebound in BTC retesting all-time highs above $78,000. Bearish case (approximately 25%): Nonfarm payrolls exceed expectations, raising rate hike expectations; Iran escalation pushes crude oil above $100; global risk assets come under synchronized pressure, and BTC tests the $52,000-$56,000 range. But even in the most bearish path, BTC would still be over 260% above its 2022 lows—the long-term uptrend remains far from broken.

In summary, the current crypto market is undergoing a typical cyclical adjustment within a bull market. Panic is a normal component of market mechanisms—it compresses valuations, cleanses excessive leverage, and distinguishes speculators from long-term holders. For students and investors, the most important thing now is not to be swayed by emotion into making irrational decisions, but to return to fundamentals—examining hash rate trends, stablecoin growth, regulatory evolution, and the real-world application and adoption of decentralized technology. A 34% decline in price does not equal a 34% decline in value. If the underlying narrative of the crypto market has not changed, the most appropriate strategy is not to panic and flee, but to maintain rationality amidst fear and uphold a long-term perspective amidst volatility. As the old Wall Street adage goes: "Bull markets are born in pessimism, grow in skepticism, mature in optimism, and die in euphoria." The current extreme fear may well be the starting point for a new round of long-term accumulation.