The cryptocurrency market faced a sharp downturn on Thursday, June 4, 2026, with Bitcoin (BTC) hitting a near four-month low and dragging down other major digital assets. Bitcoin plummeted to approximately $61,311, a level not seen since early February of this year. While the leading cryptocurrency saw a partial recovery to around $62,580, it still registered a significant daily loss of roughly 6.84%. This sharp decline has had a cascading effect across the crypto-linked equities sector in the U.S., impacting mining, exchange, and treasury-heavy companies.
ETF Outflows and Market Sentiment Drive Downward Spiral
A primary driver behind the day's steep decline appears to be substantial outflows from spot Bitcoin Exchange-Traded Funds (ETFs). Over the preceding three weeks, these ETFs experienced net redemptions totaling approximately $3.7 billion. Data from June 3 alone showed outflows of $396.6 million for spot Bitcoin ETFs, contributing to May 2026 being the worst month for outflows this year, with a total of $2.43 billion redeemed. Ethereum ETFs also saw redemptions, totaling $53.0 million on June 3 and $429.3 million over the preceding seven days. This significant institutional withdrawal removed a crucial source of demand at a time when leverage in the market was reportedly high.
The broader market sentiment also soured, leading to a widespread risk-off attitude. This was exacerbated by a rare sale of 32 BTC by MicroStrategy, a company known for its substantial Bitcoin holdings. This move, the first BTC sale by the company in nearly four years, reportedly rattled market confidence. The Crypto Fear & Greed Index plunged to 11, indicating a state of "Extreme Fear" among investors, a level not seen in months. This extreme pessimism signals a potential washout of leveraged positions, with reports indicating that over $1.8 billion in leveraged long positions were liquidated in the preceding 24 hours, with longs absorbing approximately 85% of the losses.
Ethereum and Altcoins Follow Bitcoin's Plunge
The sell-off was not confined to Bitcoin. Ethereum (ETH), the second-largest cryptocurrency by market capitalization, also experienced a significant drop. On June 4, Ethereum was trading around $1,771.87, down approximately 4.43% over the preceding 24 hours. Other major cryptocurrencies followed suit, with Binance Coin (BNB) briefly falling below the $600 mark and Solana (SOL) plunging 7%, losing the $70 level. The total cryptocurrency market capitalization reportedly fell by 4% to a low of $2.18 trillion, approaching levels seen in February. Compared to its peak of $4.2 trillion last year, the market has seen an outflow of approximately $2 trillion, representing a cumulative decline of 48%.
Impact on Crypto-Linked Equities and Future Outlook
The downward pressure on digital assets directly impacted U.S. crypto-related stocks. MicroStrategy (MSTR), whose shares are highly sensitive to Bitcoin's price due to its significant BTC holdings, fell 7.01%. Coinbase (COIN), the cryptocurrency exchange operator, dropped 6.19% as trading sentiment cooled and volume expectations diminished. Mining companies also saw sharp declines, with Marathon Digital (MARA) sliding approximately 4%, CleanSpark falling 5.7%, and Hut 8 losing 5.5%. These companies' economics are closely tied to the price of the cryptocurrencies they mine.
Despite the sharp declines, some indicators suggest that Bitcoin may be nearing oversold conditions. The daily Relative Strength Index (RSI) was reported at 18.20, well below the 30 oversold threshold, historically a precursor to short-term relief bounces. However, analysts caution that the broader trend remains bearish, and a sustained recovery would require reclaiming key moving averages, such as the 20-day Exponential Moving Average (EMA) currently around $70,200. Key support for Bitcoin is now eyed around the $63,000 to $67,000 zone, a level that will be critical to watch in the coming days.
The crypto market's immediate future remains uncertain, with upcoming economic data, including U.S. Non-Farm Payrolls (NFP) on June 5, likely to influence trading sentiment. The ongoing outflows from Bitcoin ETFs and the lingering effects of the leveraged position liquidations suggest that volatility is likely to persist. Investors will be closely monitoring ETF flow data and macroeconomic indicators for signs of a potential stabilization or further decline.