Bitcoin suffered a severe blow this week, falling to its lowest point in over half a year due to multiple bearish factors, significantly shaking confidence in the cryptocurrency market.
Bitcoin touched a low of $59,099.25 on Friday, marking its lowest level since October 2024. It ended the day down 3.4% at $61,514.90, accumulating a 16% loss for the week.
The trigger for this decline was Michael Saylor's Strategy company selling part of its Bitcoin holdings, which led to hundreds of millions in forced liquidations. Subsequently, stronger-than-expected May non-farm payroll data pushed U.S. Treasury yields higher, further suppressing risk assets.
Strategy's stock price closed down 6.9% for the day, with a staggering 24% weekly drop—its worst single-week performance since November 2022. Meanwhile, short trading targeting Strategy heated up sharply in the options market, with an ETF (WNTR) related to shorting the company's stock rising 30% cumulatively since May 11.
This round of Bitcoin decline is not due to a single factor. Charles-Henry Monchau, Chief Investment Officer at Syz Group, told CNBC that Strategy's selling, combined with the crowding-out effect of "hot money chasing other assets," drove this week's downturn.
"Speculative funds are fully betting on AI stocks and memory chips, especially in the Korean market. At the same time, the market anticipates that the upcoming super IPO will attract some retail funds into the new stock."
The legislative outlook for the crypto market structure bill, the "Clarity Act," also continues to dim. As Congressional legislative priorities shift and lawmakers remain divided on key provisions, this bill, seen as a catalyst for a new round of Bitcoin gains, seems increasingly out of reach.
From the current price level, Bitcoin has fallen more than 50% from its all-time high of approximately $126,000 reached in October 2025.
Bitcoin's two core narratives—"digital gold" and "high-beta tech stock"—are simultaneously under pressure. While uncertainty in the Iran situation continues to weigh on Bitcoin, U.S. stocks have repeatedly hit record highs. This divergence in their trends has left the market deeply puzzled.
Rajiv Sawhney, Head of International Portfolio Management at Wave Digital Assets, told CNBC:
"Just a month ago, Bitcoin's 30-day Pearson correlation coefficient with the Nasdaq and S&P 500 was near perfect positive correlation. However, over the past few weeks, this relationship has sharply broken down. Global equities, especially tech stocks, continue to reach new all-time highs, yet Bitcoin has failed to rise in tandem."
Regarding Bitcoin ETFs, there was a net inflow of approximately $3 million on Thursday, ending a streak of 13 consecutive trading days of net outflows—a record-setting duration. However, the total assets under management have shrunk from $107.8 billion on May 14 to $80.4 billion.
Despite the gloomy market sentiment, some voices are choosing to speak out against the trend. Matt Cole, CEO of Strive, said on Friday that Bitcoin's fundamentals have "never been stronger." He pointed out that this is the fifth time Bitcoin has touched its 200-week moving average, stating, "The previous four times were perfect buying opportunities. I don't think this time will be any different."
In the options market, bearish trading targeting Strategy (MSTR) spiked sharply on Friday.
Put option volume was more than double call option volume for the day, with the scale of put buying exceeding call buying by more than three times. The trading volume was roughly three times the average daily volume over the past month. Out of approximately $335 million in option premiums for the day, $250 million was related to put options.
Some of the largest put option purchases came from the spread strategy employed by the YieldMax Short MSTR Option Strategy ETF (WNTR), which shorts Strategy stock and generates income by selling put option spreads.
Strategy's floating-rate preferred shares (STRC) are also under pressure. The shares closed down 3.6% at $92 on Thursday, hitting their lowest price since last November.
David Dziekanski, CEO of Quantify Funds, noted that Saylor previously claimed STRC was an alternative to avoid selling Bitcoin but then used the cash originally promised to be retained to repurchase bonds and ultimately sold Bitcoin.
"This has significantly increased the market's risk premium pricing for Michael Saylor. STRC now needs to offer a significantly higher yield to return to par value."
The continued rise in U.S. Treasury yields also poses additional pressure. After Friday's non-farm data, the CME FedWatch tool showed the probability of a rate hike this year rose above 40%. Historically, rate hike cycles have often significantly suppressed crypto assets, with a particularly direct impact on credit instruments like STRC.
