Bitcoin Rebounds as Middle East Tensions Ease

Bitcoin continued its sell-off, sliding toward $65,000 in early June and reaching its lowest level since late March, as sentiment remained pressured by Strategy’s Bitcoin sale and a broader shift in institutional capital toward artificial intelligence rather than digital assets. Strategy reported selling around $2.5 million worth of Bitcoin, its first divestment since late 2022, signaling a symbolic departure from its long-running accumulation approach. Investor sentiment was further pressured by sustained ETF outflows, as US spot Bitcoin ETFs recorded net redemptions for 11 consecutive sessions, totaling roughly $3.45–$3.5 billion. At the same time, risk appetite remained subdued amid renewed hostilities between the US and Iran, undermining hopes for progress in peace negotiations. Other major digital assets, including Ether, BNB, Cardano, and Solana, also traded lower, with losses of up to 2%.

Bitcoin fell more than 2% to below $70,000 in early June, hitting its lowest level since April 8, as geopolitical tensions and weakening institutional demand weighed on sentiment. Market pressure was driven by concerns over the US–Iran conflict as well as Strategy Inc.’s rare Bitcoin sale, which added to worries about corporate treasury demand. Strategy disclosed the disposal of about $2.5 million worth of Bitcoin, its first sale since late 2022, marking a symbolic break from its long-standing accumulation strategy. Investor sentiment was further undermined by sustained ETF outflows, with US spot Bitcoin ETFs recording net withdrawals for 11 consecutive sessions, totaling around $3.45–$3.5 billion. At the same time, some capital rotation appeared to be moving toward equities, as strong risk appetite in AI and semiconductor stocks coincided with crypto outflows, suggesting a shift in investor positioning across risk assets.

Bitcoin fell to around $74,000 in late May, reaching its lowest level in over five weeks, coinciding with signs of cooling institutional demand. US spot-Bitcoin ETFs have posted roughly $1 billion in net outflows so far this month, snapping a two-month streak of inflows. Bitcoin’s implied volatility also dropped to a nine-month low, as muted trading activity and waning speculative interest reduced demand for downside protection in the options market. Meanwhile, risk appetite was further dampened by ongoing Middle East uncertainty, as renewed hostilities have raised doubts over the viability of a lasting agreement despite continued negotiations. Markets also remained focused on the legislative breakthrough for the crypto market, as the Clarity Act cleared the Senate Banking Committee earlier this month, though analysts note that the bill still faces an uncertain path ahead.