Why Bitcoin and The Broader Crypto Market Prices Are Crashing

Bitcoin was on track to conclude the week on a bearish leg and the same sentiments were expressed across the rest of the crypto market prices. The reasons behind the bearish outcome may offer insights into whether the market could extend the same bearish trend into June.

For context, Bitcoin slid below $104,000 on Friday, and was down by over 5% from its weekly peak. The total crypto marketap was down by slightly over 1.3% in the last 24 hours and just over 6% from the weekly top.

One of the major reasons for the bearish sentiment was the rising expectation that inflation will rise in June. The FED previously stated that they were waiting to see how things will unfold and this could determine the economic measures to deploy.

The risk of higher inflation could bring back the possibility of higher rates, which would further erode investor confidence. such an outcome would likely suck liquidity out of risk0n assets such as Bitcoin and altcoins.

Massive Options Expiry Contributed to FUD

30 May marked the last Friday of May and this is important because options expire in the last Friday of every month. Two main factors to consider include investors opting to exit their positions to avoid the potential volatility, and massive liquidations potentially feeding into the sell pressure.

Recent reports revealed that more than $10 billion worth of Bitcoin options were slated to expire in the last Friday of May. The number of call positions were notably higher than puts.

The put/call ratio confirmed that most investors anticipated higher prices. Unsurprisingly, this set up Bitcoin for yet another leveraged shake down.

More than $205 million worth of long positions were liquidated on Friday. This marked the highest daily long liquidations that occurred in May. In comparison, only $14.1 million worth of short positions were liquidated during the same day.

The total crypto marketcap approached its 3-week support level, suggesting the possibility that price could bounce back in the coming week.

However, the probability of breaking below that support was also high on account of the rising uncertainty.

In other words, investors have to come to terms with the prospects of Bitcoin dipping below $100,000 once again. The latest crash this week may also turn out to be a pre-rally retracement if investors treat cryptocurrencies as safe haven assets when tariff disruption makes a comeback.

In short, the build-up of bullish expectations so far this month, fueled by positive news and healthy institutional demand created the setup. Interestingly, the risks of liquidation were high considering that appetite for leverage recently surged to levels last seen near the January 2025 top.

Market Data Signaled Declining Confidence for the Crypto Market Prices in June

Multiple data points signaled that investors have been preparing for potential bearish activity and market disruption in June. This was largely because U.S president Donald Trump previously revealed plans to escalate tariff wars with Europe.

The tariffs-related concerns resulted in over $1.7 billion worth of spot outflows since Sunday. A clear indication of bearish expectations in the spot segment.

Institutional activity sustained hopium during the week but $346.8 million in ETF outflows on Thursday fueled the bearish expectations. Note that Thursday’s ETF outflows also marked the biggest single day ETF outflows observed in the last 2 months.

ETF flows in May were mostly positive in May. The fact that price was also coming off a new all-time high achieved earlier in the month also contributed to bearish expectations in the short term.

All these factors resulted in a significant drop in market sentiment especially in the second half of the week. The crypto prices fear and greed index threatened to slide into the neutral zone. It dropped from 74 to 60 in the last 24 hours at the time of observation.

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