Bitcoin Slides Below $66,000 as ETF Outflows and Geopolitical Tensions Weigh on Crypto

Bitcoin and Major Altcoins Decline Amid Market De-Risking

Bitcoin, the world’s largest cryptocurrency, dropped to a low of around $65,700 on Tuesday night before recovering slightly to $66,460 as of 1:00 a.m. ET Wednesday, according to The Block’s BTC price page. Ethereum slipped 7.1% to $1,849, while BNB declined 7.2% to $635. XRP fell 4.8%, and Solana dropped 7.7%.

U.S. spot bitcoin ETFs recorded $519.2 million in net outflows on Tuesday, extending a negative flow streak to 12 consecutive days, according to SoSoValue data. Spot Ethereum ETFs also saw $90.2 million in net outflows, their 16th straight day of withdrawals.

Dominic John, an analyst at Zeus Research, attributed the decline primarily to heavy institutional ETF outflows, aggressive long liquidations, and broader macro de-risking that reduced liquidity across the crypto market. He noted that forced unwinds in leveraged positions accelerated downside pressure in major assets.

Geopolitical Tensions, Oil Prices, and Strategy’s Bitcoin Sale

Andri Fauzan Adziima, research lead at Bitrue Research Institute, linked the market moves to fresh airstrikes in the Middle East, which pushed oil prices higher and intensified risk-off sentiment. WTI crude futures rose 1.13% to $94.82, while Brent crude climbed 1.04% to $97.07 per barrel. Adziima said these developments sparked large long liquidations, accelerated ETF outflows, and highlighted bitcoin’s high-beta risk-asset behavior over safe-haven characteristics.

Asian equities traded mixed on Wednesday. Japan’s Nikkei 225 rose 2.95% during intraday trading to a record high, while China’s CSI 300 gained 1.13% and Hong Kong’s Hang Seng index fell 1.56%.

Beyond geopolitical factors, Peter Chung, head of research at Presto Research, said the market is still digesting Strategy’s recent bitcoin sale. The Michael Saylor-led firm disclosed on Monday that it sold 32 BTC for roughly $2.5 million between May 26 and May 31, its first bitcoin sale since December 2022. Strategy’s Nasdaq-listed shares (MSTR) fell 9.15% to $136.08 on Tuesday and are down about 23% over the past month.

Chung noted that some market participants looking for a bitcoin-specific narrative are pointing to Strategy’s sale, which Saylor described as an “inoculation.” Chung added that it remains unclear whether this alone explains bitcoin’s recent underperformance, noting that the decoupling began weeks earlier, likely driven by selling to fund rotation into AI-themed equities.

Looking ahead, John of Zeus said downward pressure on crypto markets could persist through June, while Adziima suggested it may ease within days to one or two weeks if headlines cool or de-escalation signals emerge, adding that event-driven dips in this cycle have rebounded quickly.

FAQ

Why did bitcoin fall below $66,000?
Bitcoin’s decline was linked to heavy ETF outflows, aggressive long liquidations, and broader macro de-risking, alongside heightened geopolitical tensions and rising oil prices.

How significant were the ETF outflows?
U.S. spot bitcoin ETFs saw $519.2 million in net outflows on Tuesday, marking 12 consecutive days of redemptions, while spot Ethereum ETFs recorded $90.2 million in net outflows for a 16th straight day.

What role did Strategy’s bitcoin sale play?
Strategy sold 32 BTC for about $2.5 million, its first sale since December 2022. Analysts noted that some investors see this as a bitcoin-specific factor, although the broader underperformance appears to have started earlier.