Bitcoin has dropped below $63,000 on Tuesday, reversing Monday's brief rally to $64,000 as fresh selling pressure swept through risk assets. According to The Block, bitcoin last changed hands around $62,750, while ether traded below $1,700. The pullback came even as Wall Street posted a recovery session overnight, with analysts attributing the rebound to natural whipsaw following Friday's sharp selloff when May's nonfarm payrolls report showed 172,000 jobs added against an 80,000 consensus, triggering rapid unwinding of stretched positioning.
JPMorgan analysts report that the retreat from the debasement trade has accelerated for bitcoin in recent weeks, marking a significant shift in investor sentiment. According to JPMorgan's managing director Nikolaos Panigirtzoglou, gold exchange-traded funds saw around $20 billion of outflows in the week through June 5 after modest inflows the previous week, while bitcoin ETFs have recorded gradually increasing outflows over the past four weeks. The debasement trade, driven by concerns including geopolitical uncertainty, persistent inflation, rising government debt, and weakening confidence in fiat currencies, has been fading across ETFs, futures markets and investor positioning. JPMorgan's momentum indicators show gold investors cutting long positions since late February, while bitcoin initially benefited from short covering before reversing in early May.
Onchain and ETF flow data are painting a structurally bearish picture beneath the headline price action. Bitfinex analysts said the market has transitioned from the accumulation phase that drove bitcoin's rally earlier in the year into a distribution regime. Spot Cumulative Volume Delta has turned sharply negative after a strong April-May accumulation phase, indicating that recent buyers are actively exiting into weakness rather than holding or adding. The Short-Term Holder cost basis has also broken below the True Market Mean of $77,800, confirming that newer entrants are underwater and adding overhead resistance to every rebound.
US spot Bitcoin ETFs recorded a net outflow of $91.4 million on June 8, adding to a cumulative $4.2 billion bleed across three consecutive weeks of outflows. According to SoSoValue data, this represents the largest institutional de-risking streak of 2026. Ethereum ETFs ran counter to the trend, posting $82.4 million in net inflows on the same day. Bitfinex identified the ETF channel as the central variable for any recovery, noting that the marginal buyer over the past 18 months has been the U.S. spot ETF market, which is highly sensitive to real yields that are rising for the wrong reasons.
JPMorgan analysts highlight a shift in market correlations that shows bitcoin's correlation with 10-year U.S. real Treasury yields has recently turned negative, following a similar move in gold earlier this year. This suggests that the opportunity cost of holding non-yielding assets is weighing on both bitcoin and gold. Simultaneously, gold's correlation with the S&P 500 has moved closer to bitcoin's traditionally positive relationship with equities, indicating that both assets have recently behaved more like risk assets than portfolio diversifiers. JPMorgan also tracked allocations by non-bank investors to bitcoin and gold relative to equities, bonds and cash, finding that after steadily rising since mid-2023, those allocations have fallen back to levels last seen in March 2025. The analysts noted that bitcoin's decline appears to have been amplified by weaker liquidity in both ETF and futures markets.
JPMorgan's report largely reiterates their cautious stance on digital assets, with analysts saying a stronger second half would likely require digital asset treasury companies to provide greater clarity on meeting rising dividend obligations, potentially by rebuilding dollar reserve funds, and for U.S. crypto market structure legislation to pass. The analysts currently assign less than a 50% probability to the passage of U.S. crypto legislation. Despite the cautious outlook, the analysts reiterated that current weak market sentiment could ultimately prove 'a bullish contrarian signal going forward'. The broader macro governor remains unchanged with April CPI at 3.8% annually and May inflation data due June 10, keeping short-term yields elevated and real yields restrictive.
