Bitcoin dropped to $61,655 on June 4, extending a three-day decline that pushed the asset below $62,000 and erased months of recovery. The move wiped out about $1.8 billion in leveraged positions, liquidated more than 272,000 traders, and pushed Bitcoin below Strategy’s average purchase price for the first time since late 2023.
The decline did not begin with a single shock. The market had already become fragile because leverage in derivatives had climbed to levels last seen before the major October 2025 crash. On June 2, Bitcoin’s futures open interest leverage ratio reached 2.63%, while the perpetual futures reading hit 2.48%. That left the market highly exposed to a forced-selling chain reaction.
Leverage had already stretched the market thin
When long positioning becomes crowded, liquidation levels tend to cluster close together. Once price falls into the first band of liquidations, exchanges automatically close positions, sending more sell orders into the market and pushing price into the next cluster. Funding rates were also elevated, showing that bullish positioning had become expensive and crowded.
That structure turned a sharp intraday move into a broader collapse. Bitcoin initially fell from about $71,765 to $67,895 on June 2. Instead of rebounding, the market kept sliding. Roughly $394 million in leveraged positions were liquidated in a single hour, then about $1.02 billion over 24 hours, with the total damage later swelling toward $1.8 billion.
Strategy’s 32 BTC sale became the emotional trigger
The event that shook sentiment was Strategy’s disclosure on June 1 that it had sold 32 Bitcoin for around $2.5 million to help fund dividends on its preferred stock. In pure market terms, that amount was too small to move Bitcoin on its own.
Its significance came from what traders thought it meant. Strategy, led by Michael Saylor, has long been treated as the model for corporate Bitcoin accumulation. The filing marked the company’s first Bitcoin sale since 2022, and that dented a belief many holders had treated as fixed. In a market already loaded with leverage, that shift in sentiment was enough to start the first leg lower.
Exchange inflows rose as selling pressure spread
On-chain activity showed that more Bitcoin was moved onto exchanges during the drop, often a sign of intent to sell. Total exchange inflows climbed to about 58,617 BTC, the highest since April 14 and above the roughly 46,527 BTC seen before the October 2025 crash. That suggested pressure was not limited to derivatives; spot selling was building as well.
The liquidation breakdown shows how one-sided the market had become. About $1.57 billion of wiped-out positions were longs, compared with only about $215.7 million in shorts. Bitcoin accounted for more than $833 million in liquidations. Ethereum followed with nearly $480 million as it fell toward $1,857, while Solana saw more than $90 million in liquidations and XRP lost around 3%. Total crypto market capitalization fell to about $2.42 trillion.
Weak demand and ETF outflows kept the market under pressure
A typical flash crash often snaps back quickly. This one did not. Bitcoin opened June 3 below $67,000, slipped toward the $65,400 area, and by June 4 had broken below $62,000. Each bounce attempt was sold.
CryptoQuant head of research Julio Moreno said the correction reflected weakening Bitcoin demand rather than a broad macro-driven selloff. By his measure, total Bitcoin demand across speculative and spot activity was shrinking by roughly 232,000 BTC per month. At the same time, US spot Bitcoin ETFs recorded a consecutive outflow streak of 11 to 12 days, with total withdrawals of about $3.45 billion. The largest institutional demand channel was not absorbing the decline.
The report also pointed to a broader defensive backdrop: renewed Middle East tensions, higher oil prices, caution ahead of US labor data, sticky inflation concerns, and a stronger dollar. It also noted reported movement from old Mt. Gox-related wallets, a type of activity that can revive fears of dormant supply reaching exchanges.
Prediction markets reflected the turn in sentiment. On Polymarket, traders priced roughly a two-thirds chance that Bitcoin falls to $55,000 or lower before 2027, and a 72% chance that it drops below $65,000 in 2026. Contracts tied to $50,000, $45,000, and even $40,000 also carried meaningful pricing.