Bitcoin price crashed below $66,000 on Wednesday, hitting an intraday low near $65,422 and deepening a selloff that has erased more than 20% of the token’s value since mid-May. The selling pressure is coming from outside crypto this time, as investor cash rotates into soaring AI stocks and a queue of high-profile tech IPOs, pulling liquidity out of a market already stuffed with leverage.
Peter Schiff, the longtime gold advocate and Bitcoin critic, used the drop to repeat his $20,000 target. The more measured warning came from research firm K33, which says the money leaving Bitcoin is chasing the AI trade and may not be back this summer.
Capital Is Leaving Bitcoin for the AI Trade
The numbers describe a market in retreat. BTC has dropped roughly 11% in a week and more than a fifth since its mid-May high, and the mood has flipped hard. The Crypto Fear & Greed Index, which scores market sentiment from 0 to 100, fell to 11 in a single day, deep in “extreme fear” territory after sitting at 23 the day before.
What separates this slide from the usual crypto wobble is where the cash is going. K33, in a Tuesday note pointedly titled “Summertime Sadness,” argued that liquidity is being siphoned out of Bitcoin and into equities tied to artificial intelligence. Spot exchange-traded fund (ETF) money is heading out the door, institutional buyers have gone quiet, and existing holders are trimming. There is no fresh bid to catch the fall.
- $65,422 intraday low on Wednesday, the weakest level since February.
- More than 20% erased since the mid-May peak.
- Sentiment at 11 on the Fear & Greed scale, down from 23 a day earlier.
For a token that spent the spring trading like a macro safe-haven proxy, the reversal has been quick and unforgiving. The drop accelerated once it broke below $68,000, with each technical level giving way to the next.
The Headwinds Stacking Up at Once
No single event broke the market. Several hit inside the same window. The most damaging was macro. A stronger-than-expected US jobs report this week pushed traders to price out any Federal Reserve rate cut for the rest of the year, removing the cheap-money tailwind that risk assets had been counting on.
The rest piled on from there:
- A record-setting run of redemptions from US spot Bitcoin ETFs.
- Strategy, the corporate Bitcoin treasury run by Michael Saylor, moving coins to Coinbase ahead of its first sales in years, which rattled holders who had treated the company as a permanent buyer.
- Escalating US-Iran tensions feeding a broader risk-off mood across markets.
- Capital rotating into AI equities and a pipeline of pre-IPO names.
- Over-leveraged long positions getting flushed as the price broke key support.
Any one of these would have been survivable. Hitting together, they pulled support out from under the price in the same week.
Where the Money Went Instead
The clear winner in this rotation is the AI trade. While Bitcoin bled, cash flowed toward AI-linked equities and the anticipated public debuts of SpaceX and Anthropic, the AI lab backed by Amazon and Google. The math for a lot of investors is plain opportunity cost: why hold a volatile asset stuck sideways when AI names keep printing gains.
K33’s head of research, Vetle Lunde, put it bluntly in the firm’s note.
Much of the market views the opportunity cost of holding BTC as too high while anything AI-related soars.
That one line captures the whole dynamic. Bitcoin competes for the same risk budget as Nvidia, the pre-IPO AI darlings, and a tech-stock rally that has not let up. When that contest tilts, crypto becomes the funding source, the place traders sell to buy something else. The looming SpaceX and Anthropic listings sharpen the pull, giving big allocators a reason to keep dry powder ready rather than rotate it back into BTC.
Leverage Turned a Dip Into a Rout
A falling price is one thing. A falling price stacked on record leverage is what produced Wednesday’s air pocket. Even as Bitcoin dropped, funding rates in perpetual futures rose, a sign traders kept piling into leveraged long bets against a weakening tape. When the price slipped, those positions blew up.
Long liquidations crossed $1.35 billion in 24 hours against just $136 million on the short side, part of roughly $1.86 billion in total crypto liquidations. At the same time, CME Bitcoin futures open interest (Chicago Mercantile Exchange) fell to its lowest since October 2023, and the ETF exit kept setting records.
| Metric | Latest reading | What it signals |
|---|---|---|
| Spot Bitcoin ETF flows | 62,794 BTC out over three weeks | Second-largest outflow streak on record |
| CME futures open interest | Lowest since October 2023 | Institutions stepping back |
| Perpetual funding rates | Rising as price falls | Leveraged longs building into weakness |
| 24-hour long liquidations | $1.35B vs $136M shorts | Forced selling amplifying the drop |
K33 reads those leveraged longs as latent selling pressure, fuel for more downside if the positions keep unwinding. Spot Bitcoin ETF flow data shows the redemptions running for weeks, the longest such streak in more than a year.
Schiff’s $20K Call and Saylor’s Pressure Point
Two figures frame the bear case: Schiff’s $20,000 target and the slow erosion building under Michael Saylor’s Strategy.
Schiff Doubles Down From the Sidelines
Peter Schiff has called nearly every Bitcoin rally a top for a decade, and the crash handed him fresh ammunition. In a post on X warning about Bitcoin complacency, he wrote that “there is way too much complacency in Bitcoin for the market to be anywhere near a bottom.” He sketched out a path: once Bitcoin breaks $50,000, “it should be a quick fall below $20K, which should be a big enough drop to shake the conviction of long-term HODLers, causing many to finally throw in the towel.” HODLers is crypto slang for buy-and-hold investors who refuse to sell.
He also praised entrepreneur and investor Mark Cuban for selling his Bitcoin, calling it the right move after Cuban decided BTC was not “digital gold.”
Strategy’s STRC Becomes the Weak Link
Schiff’s sharper attack targeted Strategy and its STRC perpetual preferred stock, which slipped below $96.50 this week. He warned of a “death spiral”: the variable dividend across Strategy’s preferred shares can only be funded by selling Bitcoin or finding new buyers, and each fresh issuance raises the bar for how high BTC must climb to keep the structure solvent. Strategy leaned harder into preferred stock as its financing engine through early 2026, and annual dividend obligations across its four preferred series now top $1.7 billion. Wall Street analysts have already trimmed their MSTR price targets after the BTC sales.
How Deep the Selloff Could Run
The market is already pricing more pain. On Kalshi, the regulated prediction-market exchange, traders put a 66% chance on Bitcoin printing below $55,000 and roughly even odds on a sub-$50,000 print before year-end.
K33’s own stance has shifted. The firm had called $60,000 the cycle low; now it warns the leveraged setup points to “possible deeper lows” and advises caution. That is a real retreat from a research shop that had been comfortable calling a floor.
Lunde’s summary was flat: “With outside capital reluctant to enter and existing holders trimming exposure, we may be in for a choppy summer.” The bearish view no longer belongs only to perma-skeptics like Schiff. One of crypto’s more sober research desks is telling clients the bottom may sit lower than they thought, and other analysts see the weakness stretching out, with at least one warning the bear market could run into 2027. The next test is whether $60,000 holds. The options market is not betting on it.
Disclaimer: This article is for informational purposes only and is not financial advice. Cryptocurrencies are highly volatile and carry a significant risk of loss; the price moves and forecasts described here can change rapidly. Consult a qualified financial professional before making any investment decision. All figures are accurate as of publication on June 3, 2026.
