Bitcoin dropped sharply overnight and touched $59,175, setting a new low since early June. The market then partially recovered, and BTC returned to the $61,500 zone.
The decline was accompanied by large liquidations of leveraged positions. Nearly $1 billion in futures bets were wiped out across the crypto market, including positions in bitcoin, Ethereum, Solana, and tokenized versions of stocks. About $430 million in long positions were liquidated in bitcoin futures alone.
The Market Fell Without a Single Main Reason
There was no single event behind the sell-off that could explain the entire crash. The pressure came from several factors at once.
Expectations of a tighter Fed policy remain in the market, and spot bitcoin ETFs have been losing capital for several weeks in a row. Thin summer liquidity and the approaching quarterly options expiration on June 30 are also having an impact.
That is why the move was so sharp. When liquidity is lower than usual, even moderate selling pressure quickly turns into a cascade of liquidations.
The $59,000 Level Became the First Test
Previously, market maker Wintermute called $59,000 an important zone that the market would be watching. The overnight drop tested this level, but so far has not led to a full breakdown.
This is important for the short-term picture. If BTC holds the $59,000–$60,000 area, the decline can still be seen as a strong test of the lower boundary of the range.
But there is still a danger zone below. According to CoinGlass, about $1.6 billion in leveraged long positions are clustered below $58,000. If the market pushes through this level, the downward move could accelerate.
The Rebound Did Not Come From the Crypto Market
Interestingly, BTC’s recovery did not start because of internal crypto news. Support came from the technology sector, which had previously dragged risky assets down.
Micron Technology reported better-than-expected results. After the market closed, the company’s shares jumped sharply, and the entire AI memory sector revived along with them.
SK Hynix also added positivity by announcing plans for a US listing of about $29 billion. For the market, this was a signal that demand for AI memory may not be a short-term speculation, but a more sustainable story.
AI Chips Once Again Anchor Risk
Earlier in the week, fears about an overheated AI sector were weighing on markets. South Korea’s KOSPI fell sharply due to a sell-off in chip companies, and cryptocurrencies declined along with growth stocks.
Now the same theme has helped stabilize the situation. Strong Micron earnings and news from SK Hynix brought back demand for memory makers, supporting a broader appetite for risk.
For bitcoin, this is a telling connection. BTC is once again trading not as an isolated asset, but as part of global risk, which depends on the Fed, growth stocks, yields, and sentiment around AI.
ETFs Continue to Drain Support
A separate risk for bitcoin remains in spot ETF flows. During the drop below $60,000, US funds posted a net outflow of $469 million.
This was one of the largest days of withdrawals since the instruments launched in January 2024. Against the backdrop of a multi-month series of outflows, the total net inflow fell to $52.8 billion, the level of mid-July 2025.
This is an important signal for the market. During the rally, ETFs were the main channel for institutional demand. Now the same channel is working in reverse and increasing investor caution.
Inflation Remains the Main Macro Test
The next major event was the US core personal consumption expenditures index report. This is one of the key inflation indicators that the Fed tracks.
Consensus expected core PCE to rise 0.3% for the month and 3.4% year-over-year. The market was pricing in two 25-basis-point rate hikes over the next eight months.
This is critical for bitcoin. If inflation is higher than expected, the dollar may strengthen and pressure on risky assets will increase. If the data does not provide a new hawkish signal, the market will have room to stabilize.
Yields and the Dollar Keep the Market on Edge
The dollar index rose above 101, which by itself already creates a challenging backdrop for cryptocurrencies. A strong dollar usually reduces the appeal of assets without cash flow.
Another factor is the yield on two-year US Treasuries. It has approached an important technical boundary. A breakout higher could mean the market is once again expecting tighter financial conditions.
For bitcoin, this scenario is unpleasant. Rising yields support the dollar and make capital more expensive, reducing interest in volatile assets.
Oil No Longer Fuels Inflation Fears
Meanwhile, oil has almost completely lost the gains linked to the US-Iran war. Brent fell below $72.5 per barrel, and WTI traded around $69.
This could be a future positive for markets. Cheaper oil reduces inflationary pressure and could eventually soften the Fed’s stance.
But the effect is not immediate. For rates and investor sentiment, months of data matter, not just one day of oil declines. So for now, this is more of a potential positive than an already working factor for BTC recovery.
Aave Rises on Standard Chartered Forecast
Amid a weak market, Aave stood out. The AAVE token rose about 15% in a day to $80 after Standard Chartered began coverage of the asset with a long-term target of $3,500 by the end of 2030.
The bank believes the protocol could regain leadership in decentralized lending as the entire DeFi sector grows. The forecast also includes intermediate targets: $180 by year-end, then $600, $1,200, and $2,200 in the following years.
But the forecast looks very ambitious. AAVE remains far below its all-time high of $661, and the protocol itself went through a tough period after the April KelpDAO hack, which led to a sharp withdrawal of deposits and a decline in Aave’s share of the lending market.
Security Reminds the Market of Itself Again
A new incident also emerged in the market involving the Gnosis account on X. The official account was hacked and used to post a fake rewards link.
The related Gnosis Pay account warned users not to click the link or interact with the post. The project team said it notified X and is working to restore access.
Such attacks do not directly affect the price of BTC, but they keep the sector on edge. During weak markets, users are especially sensitive to any risk signals.
What Happens Next?
Bitcoin held the first blow at $59,000, but the market remains unstable. The main risk zone is now below $58,000, where large leveraged long positions are clustered.
Next, attention will turn to inflation, the Fed, ETF flows, and the behavior of AI stocks after Micron’s strong report. If the tech sector continues to recover, BTC may get support along with other risky assets.
The main takeaway is simple. Bitcoin’s overnight drop was not a separate crypto disaster, but part of a broader risk repricing. As ETFs lose capital, the dollar remains strong, and the market waits for new Fed signals, BTC will depend not only on its own levels, but also on whether the recovery in AI chips holds.
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