This report is for professional investors and information purposes only. Persons without professional investment experience should not rely on it. Not investment advice or a personal recommendation. Cryptoassets are high risk and volatile and you may lose all capital invested. See full risk information at the end of this document.
- Performance: Cryptoassets underperformed once again last week amid persistently heavy net outflows from global crypto ETPs, as renewed pressure on the major hyperscalers revived concerns over an unwind of the "AI trade" and a broader tightening in financial conditions - a backdrop underscored by the US Dollar's climb to a fresh one-year high and by resurgent geopolitical risk following the apparent breach of the Iran ceasefire; even so, Bitcoin has proven comparatively resilient, showing growing signs of seller exhaustion and deep value despite still-elevated downside risks in the short term.
- Cryptoasset Sentiment Index: Our in-house Cryptoasset Sentiment Index has recently flashed another tactical contrarian buying signal and is still signalling a bearish level of sentiment - a combination that, in our analysis, has historically tended to mark tactically attractive levels even as near-term sentiment remains depressed.
- Chart-of-the-Week: Highlights the persistently high correlation between Bitcoin and US software stocks - a cohort dominated by the major hyperscalers - reinforcing our long-standing view of Bitcoin as the "canary in the macro coal mine"; because it trades continuously and reacts quickly to shifts in liquidity, Bitcoin has anticipated this tightening in financial conditions well in advance, which implies it may continue to consolidate for as long as conditions remain tight.
Chart of the Week
Performance
Cryptoassets underperformed once again last week, weighed down by persistently high net outflows from global crypto ETPs.
The key concern remains an unwind of the "AI trade," with the major hyperscalers coming under renewed pressure. The principal risks here are a tightening of monetary policy by the Fed and of financial conditions more broadly, set against still-elevated valuations and a high degree of concentration in US tech.
Tellingly, even the BIS has warned about the rising economic risks emanating from the AI trade in its most recent Annual Economic Report: the institution listed AI among the key pressure points facing the global economy and cautioned that the current capital-expenditure boom could prove unsustainable, with any disappointment in returns risking a sudden pullback in financing and a protracted investment bust that would feed back into financial conditions. It also drew attention to the increasingly leveraged and opaque web of financing arrangements underpinning the sector.
Here we would reiterate one of our long-standing theses: Bitcoin has been the "canary in the macro coal mine," anticipating this tightening in financial conditions well in advance.
This may also help explain the persistently high correlation between Bitcoin and US software stocks - a cohort dominated by the major hyperscaler names (Chart-of-the-Week).
In contrast to the semiconductors, these companies have been hit hard by tighter financial conditions, owing to their significant debt-financed capex spending. A more detailed analysis of the risks building in the hyperscalers will form part of our upcoming Bitcoin Macro Investor report, due to be published on Wednesday the 1st of July.
The implication of this thesis is straightforward: Bitcoin may well continue to consolidate for as long as financial conditions remain tight. The recent appreciation of the US Dollar to a fresh one-year high is itself a further testament to that tightening.
A second concern for crypto markets is geopolitical. The ceasefire agreement appears to have been breached, with the US conducting fresh strikes in Iran over the weekend. This suggests that geopolitical risks are likely to stay elevated for the time being - and that the recent relief in oil prices may prove only temporary. Indeed, maritime traffic through the Strait of Hormuz has recently reversed lower again, having only briefly reached its highest level since early March in the wake of the signed memorandum.
That said, Bitcoin has proven relatively resilient in the face of all these headwinds. In our analysis, there are increasing signs of seller exhaustion and of deep value emerging - even if downside risks remain elevated over the short term.
In general, among the top 10 crypto assets Solana, TRON, and LEO were the relative outperformers. Ethereum slightly underperformed bitcoin last week.
Sentiment
Our in-house “Cryptoasset Sentiment Index” fell quickly from neutral at the start of the week to deeply negative mid-week. It has since recovered somewhat but remains negative.
At the moment, 2 out of 15 indicators remain above their short-term trend. Notably, only Bitcoin's funding rate and exchange inflows.
BTC STH-SOPR, Crypto Dispersion, BTC Long Futures Liquidation Dominance and BTC 1M Implied Volatility have all turned negative this week, reversing last week's positive readings. Together, this points to weakening on-chain investor behaviour and a cooling in speculative appetite, consistent with the broader Sentiment Index where the other nine metrics sit below their short-term trend.
The Crypto Fear & Greed Index fell to 12/100 last week, remaining firmly in 'extreme fear' territory and marking some of the lowest readings since April.
Performance dispersion narrowed slightly last week, consistent with the weaker investor sentiment and reduced speculative risk appetite.
When dispersion decreases, it may indicate that the market appears to be driven by a less diverse set of narratives which, in our analysis, has historically been associated with periods of decreasing risk appetite in prior market cycles.
Altcoin outperformance vis-à-vis Bitcoin increased to 35% of our tracked altcoins in the index. Ethereum underperformed bitcoin last week.
Sentiment in traditional financial markets as measured by our in-house measure of Cross Asset Risk Appetite (CARA) fell from 0.39 to 0.12 over the past week, signalling a considerable drop in risk appetite, which now remains relatively subdued. This has likely weighed heavily on crypto sentiment and risk exposure.
CME Bitcoin Commercials Net Positioning shows that the difference between long and short CME Bitcoin futures contracts. The reading has eased slightly from record lows of around −16.26% of open interest to −15.2% currently, suggesting investors have unwound a little short leverage but remain largely hedged, or positioned outright for downside exposure.
All in all, weak risk appetite in traditional markets, captured by the sharp drop in CARA, has likely dragged crypto down with it. Sentiment, speculation and positioning have all turned negative, with only two of fifteen indicators above their short-term trend. The build-up of short leverage has capped any rebound, but cuts both ways: an unwind, natural or forced, could spark a sharp move higher.
Fund Flows
Global crypto ETPs experienced around –1901.2 mn USD in net outflows last week, across all types of cryptoassets, after –187.4 mn USD in net outflows the previous week.
Global Bitcoin ETPs continued to experience net outflows of –1643.0 mn USD last week, of which –1818.0 mn USD in net outflows were related to US spot Bitcoin ETFs.
The Bitwise Bitcoin ETF (BITB) in the US experienced net outflows of –34.6 mn USD last week.
In Europe, the Bitwise Physical Bitcoin ETP (BTCE) experienced net outflows equivalent to –1.5 mn USD, as the Bitwise Core Bitcoin ETP (BTC1) experienced net inflows of around +0.9 mn USD.
The Grayscale Bitcoin Trust (GBTC) posted net outflows of –135.3 mn USD whereas, the iShares Bitcoin Trust (IBIT) experienced net outflows of around –1303.4 mn USD last week.
Meanwhile, global Ethereum ETPs experienced –255.0 mn USD in net outflows last week, of which US spot Ethereum ETFs recorded net outflows of around –269.2 mn USD on aggregate.
The Grayscale Ethereum Trust (ETHE) posted net outflows of –8.1 mn USD, whilst the iShares Ethereum Trust (ETHA) saw net outflows of –236.4 mn USD.
The Bitwise Ethereum ETF (ETHW) in the US experienced net inflows of +0.6 mn USD last week.
In Europe, the Bitwise Physical Ethereum ETP (ZETH) recorded net inflows of +0.4 mn USD, whilst the Bitwise Ethereum Staking ETP (ET32) saw no net inflows or outflows.
Altcoin ETPs ex Ethereum also saw net outflows of –4.2 mn USD last week.
Thematic & basket crypto ETPs posted net inflows of +1.1 mn USD on aggregate last week. The Bitwise MSCI Digital Assets Select 20 ETP (DA20) recorded no net inflows or outflows last week.
Overall, global crypto ETPs recorded outflows across most products, with the exception of Basket and Thematic products. The outflows were largely led by Bitcoin and Ethereum ETPs, namely BlackRock's IBIT and ETHA. Whilst the outflows from Altcoin ex-Ethereum products were driven by Solana, whereas Hyperliquid products recorded net inflows.
On-Chain Data
Across the week, Bitcoin fell to a new cycle low of $58k before recovering to around $60k, where price is now consolidating. This highlights the $60k region as an area of interest that, for now, continues to attract defensive demand.
Aggregate investor stress remains elevated, with the value of capital held at a loss reaching approximately $926bn, equivalent to around 87% of total invested value. The dollar-denominated value has now risen to its second-highest level on record.
Additionally, the proportion of supply held in profit by Long-Term Holders (LTHs), representing mature investors who have held their coins for more than 155 days, has fallen to a cycle low of 63.5%, suggesting that even tenured investors are experiencing discomfort at current price levels.
Despite this elevated stress profile, realised losses of $895mn remained considerably more contained than during the initial decline on the June 5th and the February 5th capitulation events, where losses reached $1.42bn and $2.96bn, respectively. This suggests that a degree of seller exhaustion may be emerging, with successive waves of loss-taking becoming progressively shallower.
Historically, declining prices alongside subsiding realised losses have been associated with a positive divergence. However, such divergences can still fail, and the signal remains unconfirmed at present.
The ETF complex recorded net outflows of approximately $651mn on 25 June, with only 2.6% of trading days having experienced larger withdrawals. However, cumulative capital invested across the complex has declined by only around 17% from its all-time high of $60.2bn, suggesting that ETF investors have retained a notable degree of conviction despite challenging market conditions.
Strategy’s STRC continues to weaken, falling to a new all-time low of $72. When the instrument trades below par, additional issuance becomes less efficient, placing further pressure on the company’s near-term capital-raising and Bitcoin accumulation strategy.
The decline continues to test STRC’s stabilisation mechanism as investors reassess its fair value in a bear market and the yield required to compensate for capital-management and communication risks. The drawdown has persisted despite Strategy raising cash through common-stock issuance and increasing its US dollar reserve, strengthening near-term dividend coverage. This suggests that investors may still be assigning some probability to Strategy needing to monetise part of its Bitcoin treasury to meet future STRC dividend obligations.
On the downside, the Realised Price at $53.3k, representing the market’s average cost basis, and the 200-week moving average at $62.4k have historically provided useful reference points for terminal cycle-low regions during deep bear markets. Our base case remains that terminal valuation forms somewhere within this range. However, should price decline further, the Long-Term Holder Realised Price at $48k represents the next key downside reference.
To the upside, the Short-Term Holder cost basis at $70.7k, representing the average acquisition price of newer investors, and the True Market Mean at $76.9k, representing the average acquisition price of active investors, mark important local and macro market equilibrium levels. A decisive reclaim of these thresholds has historically been associated with renewed market momentum and a potential return to risk-on conditions.
Finally, our Bitcoin valuation composite has fallen to the 6.4th percentile, a level historically associated with deeply discounted valuations. Read more about our valuation composite methodology here.
Futures, Options & Perpetuals
Over the past week, BTC perpetual futures open interest increased by approximately +15k BTC, while CME futures open interest fell sharply by around -102.6k BTC versus the prior week. That combination suggests positioning increased across offshore perpetual markets, while more institutionally oriented venues saw a significant reduction in futures exposure. The sharp decline in CME open interest points to a more pronounced pullback in institutional positioning, even as offshore leverage began to rebuild. Aggregate futures liquidations also rose materially from the prior week. In total, liquidations reached roughly $3.50bn over the week, versus $2.40bn previously, with long liquidations of $2.60bn and short liquidations of $0.90bn.
The week’s positioning reflected a market that remained highly reactive to macro headlines. Stronger-than-expected US economic data increased expectations of further rate hikes, as consumer spending accelerated in May and Q1 GDP was revised up from 1.6% to 2.1%. At the same time, Apple raised Mac and iPad prices by up to 25%, adding to concerns that AI-related cost pressures could keep inflation elevated. BTC prices reacted negatively to these fears, breaking below the 200-week moving average and currently hovering around the $60k support area. Liquidity is now forming around $57k on the downside and $62k on the upside, leaving the market in a tight but more fragile range below this key long-term level.
Perpetual funding rates, measured on a 7-day moving average, ended the week higher at around +3.66% annualised, up from +2.25% last week. That suggests futures positioning became more constructive across perpetual markets, although the move occurred alongside a sharp increase in long liquidations, indicating that leverage was rebuilt but remained vulnerable to downside price shocks.
At the same time, the BTC 3-month annualised basis ticked down to around +2.3%, from +2.8% last week. That leaves the futures curve still modestly positive, but slightly flatter, reinforcing the view that term futures demand remains present but subdued. The softer basis also contrasts with the rise in perpetual funding, suggesting near-term leverage appetite improved while longer-dated institutional demand remained under pressure.
In options markets, BTC Deribit options open interest decreased modestly by roughly -106k BTC, bringing total open interest down to 337.7k BTC. The Deribit put-to-call open interest ratio decreased slightly to 0.66, while the equivalent metric across IBIT options moved higher to 0.83 by week’s end.
Taken together, these moves suggest options exposure declined overall, while positioning became more defensive across ETF-linked markets. The decline in Deribit options open interest points to a reduction in crypto-native options exposure, while the lower Deribit put-to-call ratio suggests relative downside hedging eased modestly on that venue. By contrast, the rise in the IBIT put-to-call ratio suggests ETF-linked options investors became more defensive as spot traded below the 200-week moving average.
The 25-delta skew was broadly flat at the short end of the curve, with both the 1-week and 1-month tenors little changed, while the 3-month and 6-month tenors moved higher. That suggests near-term downside protection did not reprice materially despite spot weakness, likely because short-dated hedges had already been reset after the move lower and liquidity is now concentrated around nearby support. The rise in longer-dated skew, however, points to increased demand for medium-term downside protection, as investors hedged against the risk that tighter policy expectations and persistent inflation concerns continue to weigh on risk assets beyond the immediate trading range.
Total GEX, on a 7-day moving average basis, increased from around -$2.50bn to -$1.99bn. This suggests dealer positioning remains negative, but less so than last week, leaving the market still sensitive to hedging flows around nearby strike levels, although slightly less mechanically reactive than before. In practical terms, spot may still remain vulnerable if price moves sharply through key liquidity zones, but the reduction in negative gamma implies somewhat less amplification from dealer hedging than last week.
Dealer gamma exposure also remains concentrated around important nearby levels, with the bulk of negative gamma clustered around the $57k to $58k strikes. That leaves the market most sensitive to a renewed move towards the lower end of the current liquidity range. By contrast, positive gamma is concentrated around the $62k area, suggesting stabilising dealer flows sit closer to the upper end of the range and may help dampen volatility if BTC can recover toward that level.
In short, Bitcoin weakened over the week as stronger US economic data, renewed rate-hike concerns, and inflation pressure from AI-related costs pushed spot below its 200-week moving average. Liquidations rose sharply to $3.50bn and were heavily concentrated in longs, while perpetual open interest increased but CME open interest declined materially. Funding improved, basis softened, options exposure fell, and longer-dated skew rose as traders paid up for medium-term downside protection. With dealer gamma still negative and liquidity concentrated around $57k to $62k, prices remain highly sensitive around the current $60k support zone.
Bottom Line
- Performance: Cryptoassets underperformed once again last week amid persistently heavy net outflows from global crypto ETPs, as renewed pressure on the major hyperscalers revived concerns over an unwind of the "AI trade" and a broader tightening in financial conditions - a backdrop underscored by the US Dollar's climb to a fresh one-year high and by resurgent geopolitical risk following the apparent breach of the Iran ceasefire; even so, Bitcoin has proven comparatively resilient, showing growing signs of seller exhaustion and deep value despite still-elevated downside risks in the short term.
- Cryptoasset Sentiment Index: Our in-house Cryptoasset Sentiment Index has recently flashed another tactical contrarian buying signal and is still signalling a bearish level of sentiment - a combination that, in our analysis, has historically tended to mark tactically attractive levels even as near-term sentiment remains depressed.
- Chart-of-the-Week: Highlights the persistently high correlation between Bitcoin and US software stocks - a cohort dominated by the major hyperscalers - reinforcing our long-standing view of Bitcoin as the "canary in the macro coal mine"; because it trades continuously and reacts quickly to shifts in liquidity, Bitcoin has anticipated this tightening in financial conditions well in advance, which implies it may continue to consolidate for as long as conditions remain tight.
Appendix
Data subject to change
Combined positioning = futures and options in % of Ol
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