Bitcoin Drops 4.85% as Fed Rate Hike Fears Trigger Selloff

The 4.85 Percentage-Point Drop in Bitcoin: A Deep Dive

A stronger-than-expected US jobs report raised odds of Fed rate hikes, triggering a broad risk-off selloff across stocks, bonds, Bitcoin, and gold, with BTC pushed toward key support near $60,000. Crypto-specific flows turned negative: weeks of spot Bitcoin ETF outflows plus Strategy’s (MicroStrategy’s) first BTC sale in years undermined confidence in the “institutional bid” and set up the drop.

Macro Jobs Shock And Risk-Off Regime

Several mainstream sources agree that the immediate macro backdrop flipped risk sentiment before and during your 13-hour window.

1. The US May jobs report showed about 172,000 new jobs, roughly double consensus estimates, which pushed markets to price in a much higher probability of a Federal Reserve rate hike later in 2026. This was framed as a key trigger for a broad selloff in US stocks, bonds, Bitcoin, and even gold, with the S&P 500 down about 1.8% and the Nasdaq about 3% on the day, while Bitcoin dropped to just above $61,000 and over 17% on the week.[^cnn]
2. Crypto-focused analyses echoed this, noting that “strong jobs data kills the rate cut narrative,” removing the macro tailwind that had supported speculative assets like BTC and ETH earlier in the cycle.[^cryptobriefing]
3. Higher rate expectations lifted Treasury yields (10-year near 4.5%), which mechanically reduces the appeal of non-yielding, high-volatility assets such as Bitcoin and accelerates de-risking in leveraged trades.

In other words, macro went from “cuts coming eventually” to “higher-for-longer, maybe even a hike,” and BTC was sold alongside other risk assets. Your 13-hour move sits squarely in this window where that repricing hit.

The move was not BTC-specific in isolation. It was part of a cross-asset shift where macro data made the whole “risk” bucket less attractive.

ETF Outflows And Strategy’s BTC Sale Weakened The Floor

Bitcoin was already structurally weaker before this 13-hour leg because two pillars of the bullish narrative had cracked: spot ETF flows and MicroStrategy/Strategy’s relentless accumulation.

Spot ETF outflows and weaker demand

• Multiple reports highlight that US spot BTC ETFs had been in their longest outflow streak ever, with roughly 13–14 consecutive days of net redemptions and around $5–6 billion pulled over the past month.[^invezz_etf][^coinshares_yahoo]
• Total ETF BTC AUM reportedly fell from about $107.8 billion in mid-May to roughly $80–103 billion by early June, depending on the cut of the data.[^invezz_etf][^cmc_overview]
• On-chain data from CryptoQuant, summarized in several analyses, shows 30-day spot demand contracting by about 272,000 BTC and futures demand by about 229,000 BTC, a combined demand contraction near 501,000 BTC, indicating buyers had largely stepped back.[^invezz_demand][^ambcrypto_demand]

Strategy (MicroStrategy) selling BTC for the first time in ~4 years

• Strategy, the large corporate BTC holder associated with Michael Saylor, disclosed it sold a small portion of its BTC (about 32 coins) for the first time in roughly four years.[^coinpedia_crash][^yahoo_mktlive]
• Even though 32 BTC is trivial in size, it was heavily highlighted in coverage as symbolically important: it broke a 41-month accumulation streak and undermined the idea that this corporate treasury buyer was a one-way “black hole” for supply.[^seekingalpha_strategy][^ambcrypto_strategy]
• Several outlets explicitly link the week’s downturn and investor anxiety to this sale plus persistent ETF outflows, framing them together as a “crowding-out” effect where capital rotates into AI-linked equities and away from BTC.[^cnbc_week][^motley_crypto]

With ETF inflows reversed and the flagship corporate HODLer now a potential seller, marginal support under price was thin. That made BTC much more vulnerable to the macro shock and to forced selling.

When your 13-hour period began, BTC was already in a structurally fragile state: fewer real buyers, key “whale” behavior shifting, and the ETF channel bleeding capital instead of absorbing it.

Leverage, Technical Levels, And Liquidation Cascades

The sharpness of the move over the last 13 hours is best explained by derivatives structure and forced liquidations rather than only spot selling.

Liquidations scaled up the move

• Over the 24 hours around the break below $60,000, several sources report between about $1.1 billion and $1.57 billion of leveraged crypto positions being liquidated, the vast majority long.[^u_today_liqs][^btccom_liqs]
• One detailed report notes approximately $1.28 billion of liquidated longs versus roughly $111 million of shorts, with about $381 million in BTC longs alone.[^btccom_liqs]
• Social data and derivatives commentary references roughly $1.1–1.5 billion in long liquidations within 24 hours and about $3 billion across two days, consistent with a cascading wipe-out of over-levered positions rather than purely organic sellers.

Support breaks and oversold conditions

• BTC had already fallen from the mid-$70,000s toward the low-$60,000s, breaking through what many analysts flagged as key support zones around $73,000 and then $65,000.[^x_support]
• Technical coverage points out that BTC fell below short- and medium-term moving averages, with RSI pushed into oversold territory and important daily support zones near $62,000–$62,500 giving way.[^invezz_demand][^yahoo_brandt]
• Once the $62,000–$61,000 area broke, BTC briefly traded below $60,000 on major exchanges, hitting lows around $59,750–$59,800 before rebounding.[^yahoo_60k][^decrypt_60k]

Market-wide deleveraging

• CoinMarketCap’s market-level data shows global open interest in derivatives falling about 5–8% over 24 hours, while 24-hour derivatives volume remained very high, consistent with a forced-deleveraging event rather than a slow trend.[^cmc_overview]
• Funding rates moved sharply lower into slightly negative territory, indicating that long positioning was being unwound and new shorts or hedges were being put on.

In that context, your 4.85-point drop over 13 hours is essentially the “accelerated leg” of a larger flush: once macro knocked sentiment lower and existing support bands failed, the market’s leverage structure did the rest.

The move is not purely about new information. It is also about how over-leveraged the BTC complex was, so small incremental selling triggered a mechanical wave of forced exits.

Idiosyncratic Crypto Shocks, Rotation, And Sentiment

Finally, there were crypto-specific and cross-asset narratives that helped keep buyers on the sidelines during this period.

Zcash’s critical bug and privacy-coin confidence shock

• Zcash disclosed a critical infinite-counterfeiting vulnerability in one of its shielded pools. Although it was patched, developers admitted they cannot yet prove whether it was exploited.[^decrypt_zec][^yahoo_zec]
• ZEC crashed roughly 40–57% in 24 hours, wiping out several billion dollars of value and triggering heavy liquidations in its own derivatives.[^yahoo_zec][^x_zec]
• Several analyses note that the incident has raised concerns that increasingly powerful AI tools could discover similar latent bugs in other major protocols, including Bitcoin, even if there is no concrete evidence of that today.[^decrypt_60k]

Risk rotation into AI and IPOs

• Market commentary repeatedly highlights that speculative capital has been rotating into AI-linked equities, semiconductor names, and high-profile IPOs like SpaceX, with some analysts explicitly citing this as a reason crypto has struggled to attract new inflows.[^cnbc_week][^motley_crypto][^decrypt_rotation]
• Commentators on X describe “smart money rotating into AI stocks” and “money flowing out of every asset to fund upcoming IPOs/compute trades,” reinforcing the narrative that crypto now has to compete with a different macro trade for risk capital.[^x_AI_rotation]

Fear and capitulation in on-chain metrics

• Glassnode and CryptoQuant data summarized by several outlets show realized losses spiking to around $1.3 billion per day as BTC approached the low-$60,000s, with more than half of supply sitting at an unrealized loss and loss-making coins being sent to exchanges.[^ambcrypto_demand][^ambcrypto_strategy]
• More than 50% of total BTC supply is estimated to be underwater at recent prices, a