Crypto staged a relief rally after two weeks of vicious Bitcoin ETF selling slowed, suggesting sellers had reached exhaustion.
The Rundown
- Hot CPI and a Sidelined Fed Keep Crypto on the Back Foot
- Trump’s On-Again, Off-Again Iran Deal Whipsaws Risk Assets
- Two Weeks of ETF Outflows Finally Break — Is This the Bottom?
- Institutions Accumulate While Retail Capitulates
- On the Radar This Week
Hot CPI, Hamstrung Fed Keep Crypto Expectations On the Back Foot
The week opened with stagflationary clouds overhead. The May CPI showed inflation rising to 4.2%, a 3-year high — the hottest print since April 2023 — driven by a 23.5% surge in energy prices tied to the war in Iran. That single data point repriced the rate-cut narrative. Prediction markets now put the odds of the Fed holding rates in the 3.50%–3.75% range at roughly 99% for the June 16–17 FOMC meeting.
Goldman Sachs even pushed its first-cut forecast out to late 2027. Thanks to the energy price shock and its impact on the US economy, newly-confirmed Federal Reserve Chair Kevin Warsh has fewer tools at hand. Rising energy prices may drag headline inflation higher in the coming months.
A hot CPI and PPI print naturally spilled into crypto markets. With the rate-cut tailwind priced out, Bitcoin’s risk premium stayed elevated. Bitcoin (BTC) spent the bulk of the week defending the $60,000–$62,000 zone.
Inflation worries and renewed hostilities with Iran dominated major media headlines. Still, one constructive policy thread came from Capitol Hill, where the CLARITY Act kept inching toward a Senate floor vote.
Advocates want the market-structure framework to become law before the US midterm elections, so a floor-scheduling date could re-rate sentiment in a single session. For now, traders are treating the vote as “when, not if.” Sentiment has stayed cautious, however, with sellers dominating markets the last two weeks.
Trump’s Iran Comments Whipsaw Risk Assets
Geopolitics dictated market direction all week, and President Trump’s comments on Iran added to the volatility. By midweek, risk assets sold off hard, with the S&P 500 falling 1.62% after Trump threatened additional strikes on Iran. WTI crude pushed above $90, gold rallied toward $4,100, and BTC slid to $61,500.
Sentiment shifted by Friday after a draft 14-point US–Iran Memorandum of Understanding emerged. Trump canceled the strikes and suggested that a deal may come “as early as this weekend.” The deal could reportedly include a suspension of US oil sanctions and an Iranian pledge to reopen the Strait of Hormuz.
Oil fell to $85.25 a barrel, equities staged a broad relief rally (Russell 2000 +3.0%), and Bitcoin reclaimed $63,600. The catch is that the MOU is drafted, not signed. The market-wide relief rally will likely only hold if the deal actually closes.
Read more: What's Really Going On With Bitcoin Price and the BTC 4-Year Cycle?
Two Weeks of ETF Outflows Finally Break — Is This the Bottom?
The spot Bitcoin ETFs bled roughly $4.4 billion across a 14-day outflow streak, with total AUM compressing from about $104 billion to $80 billion — the heaviest redemption run in over a year. BlackRock’s IBIT and Fidelity’s FBTC saw the heaviest outflows, while the spot Ether ETFs (ETH) shed more than $700 million across 14 trading sessions. For the first half of the month, allocators were clearly de-risking.
Bitcoin ETF Tracker. Source: CoinMarketCap
The negative streak broke on Thursday, with marginal inflows representing the first sign of buying in nearly two weeks. It’s clearly too early to call a bottom. But the setup is starting to look constructive, with a Fear & Greed Index pinned at 16 (“Extreme Fear”), an MVRV Z-score of 0.34 (deep-value territory historically tied to capitulation lows), and a realized price near $53,500. The cleanest signal to look for is whether the next few days of ETF flows compound the inflow rather than reversing it.
Institutions Accumulate Bitcoin While Retail Capitulates
Throughout the last two weeks of selling, the positioning split was clear. Retail investors capitulated, as evidenced by Glassnode’s SOPR remaining below 1.0 for most of the week (coins changing hands at a loss). ETF outflows accelerated, and sentiment hit panic lows. Institutions did the opposite. Strategy added another 1,550 BTC between June 1 and June 7 at roughly $65,200, lifting its treasury to 845,256 BTC.
On-chain data showed crypto exchanges clocking net outflows of about 4,281 BTC on Thursday and 6,133 BTC on Friday. These are coins leaving venues for custody, which is generally a sign of larger investors accumulating. On Hyperliquid, whales built their largest net long in two months. The divergence between retail panic selling and institutional accumulation is currently at cycle extremes. This has historically been a constructive point in Bitcoin’s bottoming process.
Read more: The CLARITY Act Is Close: What Happens if Crypto’s Biggest US Bill Passes?
On the Radar This Week
- Will the US-Iran MOU be signed? A formalized deal would deflate oil prices and possibly kickstart a relief rally, whereas failure to reach a deal would turn up the heat on US inflation.
- How hawkish is Warsh? The June 16–17 FOMC meeting looks like a hold on interest rates, but the new chair’s first press conference and the dissent count in the minutes will set the tone for the H2 rate path.
- Do BTC and ETH ETF inflows follow through? Watch whether Friday’s ~$355M inflow extends into a multi-day streak — a second and third positive day may be the cleanest bottom confirmation available.
- What happens with the CLARITY Act? A markup or floor vote date would give the market its first concrete timeline for market structure — a live sentiment catalyst ahead of the looming midterms.
- Can Bitcoin reclaim and hold $65,000? That level is Strategy’s recent cost basis and a key short-term psychological line. A sustained close above it may lead to sustained bullish momentum across markets.
- Will SpaceX’s first trading week after its IPO benefit all markets? Analysts have been obsessed with the AI trade and the capital rotation from crypto into Big Tech. Does SpaceX's post-IPO stock performance complement or detract from this dynamic?
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