Bitcoin drops to $62,000 as traders cut risk ahead of Fed minutes

Bitcoin fell 2.5% to $62,227 as traders cut leveraged long positions ahead of the Federal Reserve's June meeting minutes release on Wednesday.

"Futures market selling accelerated to nearly $500 million and spot followed with $86 million in sell volume as traders reduced risk," Hyblock data showed.

The shift followed a $705 million net buying wave on Monday that pushed bitcoin above $64,000. By Wednesday, cumulative volume delta flipped to a net $586 million in selling. Long liquidations totaled $47 million against just $4 million in shorts, with a large cluster of positions near $61,000 that could accelerate any move lower, according to Coinglass data.

The confluence of a 5% spike in oil prices from US-Iran military escalation, a sharp selloff in semiconductor stocks triggered by Samsung profit-taking in Asian markets, and Strategy's sale of 3,588 bitcoin worth $216 million at prices below its $74,582 average cost has pushed the Crypto Fear & Greed Index into "fear" territory. Markets price a 73% chance the Fed holds rates steady at its July 29 meeting, with the tone of Wednesday's minutes framing the outlook for inflation and any rate cut timing.

$420 Million in Longs Liquidated as CVD Flips Negative

Bitcoin's funding rate remained positive through the week, but open interest dropped as traders closed positions rather than rolling them forward, Hyblock data showed. The divergence between positive funding and falling OI suggests the rally was driven by futures speculation rather than spot demand, making it vulnerable to rapid reversals.

The selloff extended beyond crypto. Samsung's profit-taking hit Asian semiconductor stocks overnight, while the Nasdaq opened lower as AI and chip names retreated. Morgan Stanley analysts cautioned that momentum in chip stocks is fading, while JPMorgan called the pullback a buying opportunity, according to CoinDesk.

Strategy's $216 Million Sale Casts Shadow Over Market

Strategy's sale of 3,588 bitcoin last week — its largest since 2020 — added to the bearish pressure. The company sold at an average price of roughly $60,000, well below its $75,476 average purchase price, according to an SEC filing. The proceeds will replenish dollar reserves used for preferred stock dividends.

The sale marks a dramatic acceleration from the 32 bitcoin the company sold in late May. Strategy now holds 843,775 bitcoin worth about $52 billion at current prices, down from a peak market value of roughly $106 billion when bitcoin traded near $126,000 in October. MSTR shares have fallen 75% over the past year, and the company reported an $8.32 billion loss on digital assets in its latest quarter.

The next key data point for bitcoin is the July 14 CPI release, which could either extend the relief rally or reinforce the risk-off posture that has pushed the token 50% below its all-time high.

This article is for informational purposes only and does not constitute investment advice.