Bitcoin slumps below 70k as AI stocks keep rising, and the ETF sell-off persists

Bitcoin has fallen below 70,000 for the first time in two months, as the cryptocurrency faces multiple headwinds, including uncertainty over the U.S.-Iran ceasefire, evaporating institutional demand, and capital rotating into the A.I. trade.

BTC ETFs see record outflows

U.S. spot ETFs have seen their largest and longest outflow on record. BTC ETFs have seen $3.45 billion in outflows across 11 trading sessions, according to SoSoValue data. 

  The 11-day outflow run, which started on May 15th, is the longest stretch of net outflows since the ETFs debuted in January 2024. This not only removes a key source of buying support which had aided BTC higher in previous months but also undermines market sentiment.

Strategy’s BTC sale also undermined sentiment. The largest crypto treasury firm sold 32BTC at the end of May, valued at around $2.5 million. While the amount is small, this marked the first BTC sale by Strategy in 4 years, and the move challenges the market's assumption that one of Bitcoin's most committed long-term buyers remains a consistent source of demand.

AI vs BTC

While the crypto Fear and Greed Index has fallen further into “Fear”, Wall Street's appetite for risk remains strong as U.S. equities trade around record levels.  The consistent outflows from BTC ETFs compared to record levels in US equities, particularly chip stocks, suggest that investors could be pulling capital away from crypto and rotating towards the stock market’s AI and chip rally.

Should this be the case, it raises the question of whether an AI bear market could be one of the few catalysts that could help BTC recover. With three mega AI firms set to go public this year, SpaceX, Anthropic, and OpenAI, they could drain liquidity further or burst the AI bubble.

Seasonality is another headwind

Looking ahead, seasonality offers little in the way of encouragement. According to Coinglass data, June has historically been one of Bitcoin's weaker months, with average returns barely above zero since 2013.

While seasonality alone rarely drives markets, it suggests that BTC is entering a month that typically sees weak buying interest. This, combined with evaporating ETF flows and a less supportive macro backdrop, helps to explain why traders remain cautious despite record highs in U.S. equities.

Bitcoin technical analysis   

Bitcoin faced rejection at the 200 SMA and rebounded lower, breaking below the 50 SMA and the lower band of the ascending channel. This, combined with the break below 70k keeps sellers hopeful of further downside.

Sellers will look towards 65k (the April low) and then 60k (the 2026 low).  

Any recovery would need to see buyers rise above 70k and into the ascending channel at 72.6k. Above here, the 50 SMA at 77k comes into play ahead of the 200 SMA at 79k. It would take a rise above the May high of 82.5k to create a higher high and put bulls firmly in control.  

Read more from PrimeXBT

Disclaimer: The content provided here is for informational purposes only and is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, you should consider whether you understand how these leveraged products work and whether you can afford the high risk of losing your money. The Company does not accept clients from the Restricted Jurisdictions as indicated on its website / T&Cs. Some products and services, including MT5, may not be available in your jurisdiction. The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.