Bitcoin’s Miners Turn Unprofitable as $1.6B Liquidation Cascade Resets Market Leverage

The cryptocurrency’s brutal sell-off has pushed a growing number of Bitcoin miners into loss-making territory, one of the most telling signs yet that the market has entered a phase of genuine distress. Data from Antpool shows daily earnings for common mining rigs have turned negative, a development that typically forces smaller operators to shut down. The price collapse, which erased roughly $80 billion in market capitalisation in a single session, has left 10.5 million Bitcoin held at a loss — a figure that surpasses the aftermath of the FTX implosion. Short-term holders are realising losses at a record pace, while 5.3 million coins held by long-term investors are also underwater.

The trigger for the rout was a confluence of macro shocks. May’s US jobs report smashed expectations with 172,000 new positions, more than double the forecast of 88,000. That drove the implied probability of another Federal Reserve rate hike from 40% to 57% in a single day. At the same time, rising oil prices — fuelled by stalled US-Iran negotiations and broader Middle East tensions — pushed real yields higher. Bitcoin, which had already been under pressure from persistent ETF outflows, lost its footing. The cryptocurrency tumbled 16% in a matter of days, briefly touching $59,100 — its lowest level in almost a year — before staging a partial recovery to around $63,500.

The real damage, however, was done in the derivatives market. More than 623 million dollars in Bitcoin long positions were forcibly liquidated, contributing to a total of over $1.6 billion in wiped-out positions across all crypto assets. Each wave of liquidations accelerated the price decline in a classic cascade. The open interest on Bitcoin futures collapsed from roughly $42 billion at the start of May to about $25 billion — a 40% reduction. That deleveraging means whatever recovery we are now seeing is being driven more by spot buyers than speculative leverage.

Should investors sell immediately? Or is it worth buying Bitcoin?

Institutional flows tell a story of stark divergence. Bitcoin ETFs have now suffered 14 consecutive trading sessions of net outflows, with cumulative withdrawals approaching $5 billion. Yet Strategy (formerly MicroStrategy) has bucked the trend. The company added another 1,550 Bitcoin between June 1 and June 7, spending approximately $101 million at an average price of $65,332 per coin. That brings its total hoard to 845,256 Bitcoin. The purchase came shortly after the firm sold 32 Bitcoin for the first time in years — a move made to fund dividend payments on preferred shares. JPMorgan analysts warned that the sale, though marginal in size, sent a negative signal because Strategy had long cultivated a "never sell" narrative. Thin cash reserves at the company have only added to investor unease.

Technical indicators have flashed extreme readings. The 14-day relative strength index (RSI) plunged to a cycle low of 24 on June 7 and now sits near 27 — deep in oversold territory. The MACD remains deeply negative with no sign of a turn. The Fear & Greed Index has fallen to 8, classified as "Extreme Fear". With Bitcoin currently trading roughly 19% below its 200-day moving average at around $78,500, every major moving average now sits well above the spot price. The 20-day exponential moving average is near $69,000, the 50-day EMA around $72,800.

On an hourly chart, the first meaningful resistance lies at $63,924. A break above that opens the path to $65,413 — the location of the 200-EMA on that time frame — and then toward the $67,000 to $69,000 zone where the 20-day EMA awaits. Until Bitcoin reclaims those levels, the bounce remains what it is: a counter-trend move from oversold conditions, not a confirmed reversal.

Attention is now turning to Wednesday’s US consumer price index release. Markus Thielen of 10xResearch points to hot inflation data in April as the original catalyst for the ETF outflows that have weighed on sentiment. With the market still on edge, any upside surprise in the CPI reading could tip the scales back toward risk-off, while a cooler number might give the fragile recovery a chance to put down roots.

Ad

Bitcoin Stock: New Analysis - 9 June

Fresh Bitcoin information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Bitcoin analysis...

en | CRYPTO000BTC | BITCOIN’S | boerse | 69504487 |