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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InIn a dramatic shift echoing major liquidity crises, the digital asset market has recorded its worst weekly performance since the FTX collapse, with approximately $390 billion in total market value evaporating. According to reports, Bitcoin and Ether led the sharp drawdown after a Bitcoin sale by MicroStrategy early in the week triggered a broader sell-off, pushing Bitcoin below the $60,000 threshold and erasing its entire post-election rally.
This systemic rout is compounded by $10 billion in outflows from spot Bitcoin ETFs and persistent headwinds from a strengthening U.S. dollar. Looking at peer performance, crypto-linked stocks such as Marathon Digital and Riot Platforms have mirrored this downward spiral, per market data. Investors are also weighing the impact of Fed Chair Powell’s May 31, 2026, remarks, which signaled a continued restrictive stance to combat inflation, further dampening risk appetite.
Technically, the market is focused on price action following the close on June 6, 2026, as failure to reclaim the $60,000 level could signal a deeper correction. Traders are looking ahead to next week's U.S. inflation data as a critical catalyst, especially after the ISM Manufacturing PMI printed at 54 on June 1, 2026, providing fundamental support to the dollar and maintaining pressure on the cryptocurrency sector.
Update: A new narrative has emerged suggesting the drawdown is partly driven by a structural capital rotation, with analysts and Michael Saylor pointing to massive fund flows into AI infrastructure at the expense of crypto liquidity. According to these reports, investors are increasingly pivoting toward the AI sector as a high-growth alternative, further exacerbating the selling pressure on digital assets.
Update: The recent selling pressure and Bitcoin's dip below $61,000 triggered a wave of forced liquidations, with $172 million in long positions wiped out. These liquidations highlight the extent of leverage in the market and add further downward pressure on prices in the near term.