Bitcoin Drops Below Its War Levels, Tests the 200-Week Average Near 61,500

Bitcoin fell about 5% to around $63,200 on June 4, briefly touching $61,556 and its 200-week moving average, a level it had not tested in more than a year. The drop erased the gains it made during the Iran war and put the year's bullish narrative back on the defensive.

For months our macro read has framed crypto as being in a larger correction. Bitcoin built a higher-degree top and has been grinding lower in a regime of a strengthening dollar and rising yields. That backdrop drains liquidity, and liquidity is what crypto runs on. The war spike gave bulls a brief reason to hope. That hope is now gone.

The move was mechanical as much as emotional. Spot Bitcoin ETFs bled $2.42 billion over seven days, six straight sessions of outflows and the largest weekly exodus since the funds launched in January 2024. The 12-day streak now totals $3.58 billion. As price fell, leveraged longs got hit, with more than $1.6 billion in crypto positions liquidated in 24 hours, about $1.36 billion of it long. Forced selling fed more forced selling.

BTC traded near $63,200, down roughly 13% on the week, with Ether under $1,800. The 200-week average near $61,500 is the line traders are watching now, the kind of level that has marked cycle lows before. The weakness lined up with a broader risk-off tape: the dollar at its highest since April, the Nasdaq the only major US index to close red, money rotating into defensives. Crypto traded the way it tends to when liquidity tightens.

From here the 200-week average is the test. Hold it and the bounce some have been waiting for can start. Lose it on a closing basis and the correction has more room, with altcoins the most exposed since they lean hardest on liquidity. Our view has been that bullish setups have a lower chance of playing out while the dollar and yields keep climbing. Watch ETF flows for the first green day in two weeks. That would be the earliest sign sentiment is turning.

None of this breaks the long-term case for Bitcoin. It does reset the short-term one. A market that needed leverage and inflows to keep rising just lost both at once. Different cause from past selloffs, same signal. Until the dollar eases or the flows turn, the path of least resistance stays down.