Bitcoin recovered to $59,500 on Wednesday after testing its lowest level since September 2024 at $58,000, a 9% decline over three days that triggered roughly $1 billion in liquidations of bullish leveraged positions.
The selloff coincided with $469 million in net outflows from spot Bitcoin ETFs on Wednesday and a $13 billion Bitcoin options expiry scheduled for Friday. The options market structure heavily favors downside bets: 78% of call options are priced at $72,000 or above, while put options open interest on Deribit exceeds call options by $3.4 billion.
Institutional Bitcoin holders absorbed the decline unevenly. MicroStrategy, which has accumulated $64.1 billion in Bitcoin purchases since 2020, now sits on unrealized losses as its stock price lagged the broader tech rally. The semiconductor sector, by contrast, surged: Micron Technology jumped 16% on earnings, Sandisk gained 18%, and Applied Materials rose 10%.
The divergence reflects shifting risk appetite. Crude Brent oil prices fell from $95 one month prior to $75, reducing energy costs and signaling to markets that inflation may have peaked. The US Personal Consumption Expenditures index rose 4.1% year-over-year in May, released Thursday, but the oil pullback boosted confidence in disinflation narratives. The CME FedWatch Tool now assigns an 80% probability to US interest rate hikes by December, up from 68% a month ago. The 5-year US Treasuries yield sits at 4.15%.
Government policy shifts also tilted sentiment toward traditional tech. The US government took a 9.9% stake in Intel, proposed $2 billion in federal funding for quantum computing firms, opened federal lands for data center projects, and established a framework for “frontier models” releases. These initiatives emphasize semiconductor and AI infrastructure over Bitcoin-adjacent narratives.
Bitcoin’s recovery to $59,500 suggests some buyers emerged near the $58,000 level, but the combination of ETF outflows, options expiry timing, and MicroStrategy’s widening unrealized losses underscores institutional hesitation. The $13 billion options expiry on Friday will test whether the $72,000 call strike holds as support or if put options drive further downside.
