Bitcoin Price Drops Below $66,000 as Global Stocks Hit All-Time Highs and Capital Rotates to AI

Bitcoin price has fallen sharply below the $66,000 level, marking its lowest point since February 2026 and extending a brutal eight-week decline. The crash wiped out $1.84 billion in crypto liquidations within 24 hours and pushed the Crypto Fear & Greed Index down to 11, a reading that signals extreme fear across the market.

What makes this particular downturn especially striking is its timing. While Bitcoin price continues to slide, global stock markets are doing the exact opposite. The S&P 500 closed above 7,600 for the first time ever on June 3, and both the Dow Jones and Nasdaq Composite also reached fresh all-time highs during the same session.

This growing gap between crypto and equities is raising hard questions about where institutional money is actually flowing and whether Bitcoin has lost its status as the market’s top momentum trade.

Why Is Bitcoin Price Dropping? Six Forces Behind the Crash

The current bitcoin price decline is not the result of a single catalyst. Instead, several forces converged at once, creating what many analysts now describe as a perfect storm for crypto sellers.

• Strategy’s first BTC sale in four years: Strategy (formerly MicroStrategy) disclosed in a June 1 SEC filing that it sold 32 BTC for approximately $2.5 million between May 26 and May 31. The amount is negligible compared to the company’s 843,706 BTC treasury, but the symbolic break from CEO Michael Saylor’s long-standing “never sell” philosophy rattled sentiment. According to CNBC, Strategy shares dropped nearly 6% following the announcement.
• Record-breaking Bitcoin ETF outflows: U.S. spot Bitcoin ETFs recorded over $3.4 billion in net outflows during the first week of June, the largest weekly withdrawal since these funds launched in January 2024. May alone saw $2.3 billion in net redemptions, reversing two consecutive months of inflows. Total ETF assets under management have fallen from over $100 billion to roughly $85 billion.
• Massive leveraged liquidations: Over 224,500 traders were liquidated in the 24-hour period ending June 3. Long positions accounted for $1.66 billion of the total, with Bitcoin longs absorbing $883 million. One single BTC-USDT position worth $59.67 million was liquidated on the HTX exchange.
  Macro headwinds persist: Rising Treasury yields, sticky inflation data, and renewed U.S. dollar strength have dampened risk appetite. Federal Reserve rate cut expectations continue to fade, making cash, bonds, and gold more attractive relative to volatile assets like Bitcoin.
• Geopolitical uncertainty: The U.S. Treasury sanctioned Nobitex, Iran’s largest cryptocurrency exchange, on June 2. Some analysts have suggested that broader Iranian sanctions are contributing to sell pressure, adding a layer of geopolitical risk to an already fragile market.
• According to Arkham Intel, Mt. Gox wallets have deposited 116.3 $BTC($8.16M) into Bitstamp.

The Bitcoin vs. Stock Market Divergence, Explained

For years, Bitcoin and U.S. equities moved in broadly the same direction. When stocks rallied, crypto typically followed as investors chased risk-on assets. That relationship has completely broken down in 2026.

Since hitting its all-time high above $126,000 in October 2025, Bitcoin has lost nearly 48% of its value. During the same period, the S&P 500 has gained roughly 5% and set multiple new records. The divergence is the widest it has been in recent memory.

According to CoinDesk, Charles Schwab’s director of digital currencies research, Jim Ferraioli, offered a straightforward explanation. He argued that Bitcoin’s weakness is not about fading fundamentals. Instead, Bitcoin is simply losing the momentum trade.

Ferraioli pointed out that crypto investors tend to chase momentum rather than analyze fundamentals. When Bitcoin was the hottest trade in 2024, capital poured in. Now that momentum has shifted to AI stocks, mega-cap tech, and upcoming IPOs, that same capital is flowing out.

The numbers back this up. Hyperscalers plan to spend over $600 billion on AI infrastructure in 2026 alone. SpaceX filed for what could become the largest IPO in history, targeting a valuation near $2 trillion. Anthropic and OpenAI are also preparing massive public offerings. Meanwhile, crypto firms like Kraken, Ledger, and Grayscale have all paused their 2026 IPO plans due to weakened market conditions.

According to BeInCrypto, this dynamic has created a visible capital rotation: investor money that previously chased crypto gains is now flowing into AI infrastructure and trillion-dollar tech listings.

Bitcoin ETF Outflows Signal a Deeper Shift in Institutional Sentiment

Bitcoin ETF flows have become one of the most important indicators for crypto market health. When institutional money poured in throughout 2024 and early 2025, it helped push Bitcoin past $126,000. Now, the reversal is equally significant.

Key data points that illustrate the scale of institutional retreat include the following:

• 10-session outflow streak leading into June, the longest run of net withdrawals on record
• $2.97 billion drained during that streak, according to CoinDesk
• $483.8 million in net outflows on June 2 alone, followed by another $519 million on June 3
• Cumulative net inflows across Bitcoin ETFs have fallen from $58.09 billion in April to $55.79 billion by early June

Ethereum ETFs are also bleeding, with more than $712 million in outflows over three weeks. The selling is not limited to one fund or one issuer. BlackRock, Fidelity, and Grayscale have all experienced significant redemptions.

This trend suggests that institutional investors are not just taking profits. They are actively reallocating capital toward higher-momentum themes, particularly AI-related equities that are delivering visible revenue growth and earnings revisions.

What Happens Next for Bitcoin Price?

Technical analysts are watching several key levels closely as Bitcoin navigates this correction.

• $65,000 is the immediate support zone. Bitcoin briefly touched $65,372 on June 3 before bouncing. A sustained break below this level could accelerate selling.
• $60,000 represents the next major psychological support, a level Bitcoin tested and held during its February lows.
• $54,000 is a deeper structural support that dates back to both 2024 and 2021.

On the bullish side, Cathie Wood of Ark Invest recently raised her Bitcoin forecast to $1.5 million, while Bitwise’s model suggests Bitcoin is underpriced relative to a $224,000 fair value. However, these long-term projections offer little comfort to short-term traders facing margin calls and extreme fear.

Steven McClurg, CEO of Canary Capital, told CNBC he expects Bitcoin could dip as low as $50,000 during the summer months before a recovery takes hold, consistent with historical post-halving cycle patterns.

FAQs

Why is Bitcoin price dropping while the stock market is going up?

Bitcoin is losing its position as the dominant momentum trade. Capital that previously flowed into crypto is now rotating toward AI stocks, mega-cap tech, and upcoming IPOs like SpaceX and Anthropic. While stocks benefit from improved corporate earnings and AI spending, Bitcoin faces headwinds from ETF outflows, rising Treasury yields, and Strategy’s symbolic BTC sale.

How low can Bitcoin price go in 2026?

Analysts are watching $65,000 as the immediate support level. If that breaks, the next targets are $60,000 and potentially $54,000. Some forecasters, including Canary Capital’s CEO, expect Bitcoin could test $50,000 during the summer before recovering later in the cycle.

What caused the $1.84 billion crypto liquidation event?

The liquidation wave on June 3, 2026, was driven by a combination of factors: Strategy’s first BTC sale since 2022, record Bitcoin ETF outflows exceeding $3.4 billion in one week, rising geopolitical tensions including U.S. sanctions on Iran’s largest crypto exchange, and cascading margin calls on over-leveraged long positions.

Is the Bitcoin four-year cycle still intact?

Many analysts believe the historical halving cycle remains active. Bitcoin’s April 2024 halving typically leads to new all-time highs followed by a correction phase. The current drawdown from October 2025’s $126,000 peak is consistent with prior post-halving corrections, though the depth and duration may vary given the ETF-driven market structure.

Should I buy Bitcoin during the crash?

The Crypto Fear & Greed Index at 11 indicates extreme fear, a level that has historically coincided with medium-term accumulation zones. However, extreme fear readings can persist for weeks before any reversal occurs. Investors should assess their own risk tolerance, time horizon, and diversification before making decisions. This article does not constitute financial advice.