Bitcoin has lost more than half of its value from its recent peak, suffering one of the sharpest weekly declines of 2026. It fell below the $60,000 level, breaking a major psychological and technical support zone and marking its weakest level since October 2024. But why?
Friday morning positive US jobs report shocked every financial and commodity market with the economy adding 172,000 jobs in May, more than twice the jobs economists had forecast. The report was released about an hour before market opened and it immediately triggered a major crash in both risky and traditional assets. The Nasdaq Composite suffered the biggest hit, plunging 4.2%, while the S&P 500 fell 2.6%, US Oil 2.69%, Gold also fell 3% and bitcoin more than 5%.
But why Jobs data hit so hard?
Crypto market was already in trouble and this data added fuel in the fire, strong US jobs report lower the expectation of rate cut. Lower rates typically boost stocks by making loans cheaper, supports corporate earnings and encourage the investor to take more risk but when rates stay higher the opposite happens.
Higher rates simply mean government bonds and Treasury bills suddenly offer better & safer returns. So instead of taking risk in stocks or crypto, investors can earn solid yields just by holding risk-free assets. This makes bonds more attractive and pulls capital away from riskier markets.
Obviously, Gold and Bitcoin do not pay interest so market liquidity moves to yield-bearing assets like government bonds.
Another biggest factor behind the decline is heavy selling form digital asset ETFs (Exchange-Traded Funds), starting with Strategy’s the world’s largest Bitcoin holding company first disclosed the decision to sell 32 BTC worth approximately $2.5 million on Monday, however the amount is very tiny compared with the company’s holdings of more than 843,000 Bitcoin but it caught the attention of investors because Executive Chairman Michael Saylor has always promoted a “never sell your Bitcoin” philosophy which ultimately fueled up speculation that the worlds largest corporate Bitcoin holder could sell more coins if market condition got worse more.
However, company has urged that the sale of bitcoin is not the sign of any problem. According to Saylor, occasional Bitcoin sales could help the company capture tax benefits and normalize the idea that selling a small portion of its holdings does not signal trouble. But whatever he says BTC has fallen more than 20% from the average sale price of around $77,000 at which the company sold its Bitcoin holdings.
Demand and Supply factor:
One of the key drivers behind Bitcoin’s strong rally from 2024 into 2025 was the launch of U.S. spot Bitcoin ETFs, which created a major new source of demand, allowing large investors to gain exposure to an asset without directly owning it. Instead of buying Bitcoin itself, investors can buy shares of a Bitcoin ETF, which is traded on traditional stock exchanges just like company stocks.
U.S. spot Bitcoin ETFs officially started trading in the United States on January 10, 2024, after receiving SEC approval. After that, BTC continued its strong upward momentum, making new all-time highs on daily and weekly time frames. But, in 2026 same factor of ETF flow have reversed, Spot Bitcoin ETF outflows exceeded $4.33 billion, according to Galaxy Research, during 13 consecutive days of net outflows from May 15 to June 3. This clearly indicates that the factor which was creating massive demand for BTC is now creating a massive selling pressure.
MT Gox also contributed in the fall of current bitcoin prices as the defunct exchange collapsed in 2014 still left creditors waiting more than 10 years for repayment. On Tuesday the defunct exchange moved 10,422.65 BTC from cold storage, most of the funds sent to a new wallet approximately the worth of $739 million ahead of an October 31, 2026 repayment deadline. Mt. Gox was one the of the largest Bitcoin exchange before 2014 collapse, when almost 850,000 BTC went missing. The latest transfer has added further pressure on Bitcoin, as investors remain cautious about potential creditor repayments and the possibility of increased market supply entering circulation.
On the technical side Bitcoin has lost almost all major supports this week and a major fell below $60,000 which is an important psychological support for the market yesterday.
However, price later find support near 200-week moving average, a widely watched long-term indicator that has often acted as a strong support area during major corrections.
This bounce suggests that although short term sentiment are negative but long term buyers are defending the market. If buyers defend the current zone or any positive news from the Us, Iran war came this zone could become the bottom for Bitcoin but if supports fails the next target becomes the psychological $60,000 level, followed by the high $50,000 region.
Explainer by: Syed Aamir Afzal
(Freelance Journalist).
