Bitcoin surrendered all of its April gains and closed the second quarter of 2026 roughly 11% lower. According to a June 30 report from institutional trading platform Talos, $8.35 billion in wiped-out long positions has left the market with thinner liquidity but a steadier footing heading into the third quarter. The retreat followed a Federal Reserve reluctant to cut rates and a rush into AI stocks that diverted capital away from crypto, triggering forced selling that cleared excess leverage from the derivatives market.
Three Demand Channels Shrank Together
Bitcoin rose to around $82,000 through April before higher oil prices and the AI trade unraveled the move. The top cryptocurrency ended Q2 down about 10%, Ether fell roughly 20%, and Solana lost around 13%. In contrast, the S&P 500 and Nasdaq 100 gained 16% and 28%. Bitcoin now trades near $60,000, about 52% below its late-2025 high of $126,000. Among the top 20 assets by market cap, Hyperliquid's HYPE was the only clear winner, up 142% year to date.
Behind the slide, the three main channels feeding fresh money into crypto all pulled back at once. Spot Bitcoin ETFs flipped from a peak inflow of $474 million on April 20 to net outflows of $4.08 billion over the quarter, with June alone accounting for $3.84 billion of that total. The bleeding extended into late June, when five more sessions shed an additional $1.95 billion.
Corporate buyers eased off in step with the funds. Strategy slowed its Bitcoin buying, sold 32 coins in early June and raised its STRC preferred dividend to 12% under a new capital plan that clears the way for up to $1.25 billion in possible sales. Stablecoin market value then shrank by about $4.2 billion over the same stretch, led by USDC losing $3.4 billion and Ethena's USDe falling $1.4 billion, leaving the pool of ready cash entering Q3 much shallower than where Q2 started.
$8.35 Billion Flush Resets Leverage
That thinning demand set the stage for the quarter's sharpest move. Combined Bitcoin and Ether long liquidations reached $8.35 billion, more than half of it landing between May 25 and June 7 as over-leveraged traders were pushed out and each round of selling fed the next. Open interest fell 32% for Bitcoin and 40% for Ether from their May peaks, and funding rates swung from minus 16% annualized in April to roughly flat by the close of the quarter.
Trading volume told the same story: spot volume dropped 28% to $2.32 trillion while futures held up better, a sign that traders leaned on leverage rather than buying coins outright. Thinner books amplified the drop, with Bitcoin's 2% orderbook depth falling from near $70 million in early May to about $35 million by late June. The clean-out leaves crypto entering Q3 with less cash to trade on but on steadier footing. Nothing broke underneath as stablecoins and DeFi lending kept functioning even as year-end price forecasts remained far apart.