Bitcoin dropped shortly toward the $60,000 range, resulting in long positions valued approximately $600 million to be liquidated.
The institutional liquidity has influenced Bitcoin’s rally in Q1 2026, as reflected in consistent capital outflows and a notable slowdown in inflows over exchange traded funds and derivatives channels.
According to an FXS report, Bitcoin ETF reported outflows for four consecutive weeks, totaling roughly $1 billion in May 15, $1.26 billion in May 22, $ 1.42 billion in May 29, and $ 1.40 billion in June 3.
Based on the data shown, Bitcoin decreased by roughly $61,300 on June 4 prior recovering by 5.52% over $64,690, with the recovery arising amid reports of a ceasefire agreement between Israel and Lebanon.
In addition, the economic conditions remain aggressive for risk assets, as geopolitical tensions in the Middle East are influencing risk-off sentiment and pushing capital away from cryptocurrencies toward safe-havens assets such as gold, bonds, and the U.S. dollar.
According to a Cointelegraph report, highly volatile market conditions reported over $737 million in Bitcoin liquidations over the past 24 hours, with long positions relating to losses from bullish positioning ahead of the sell-off.
Over $617 million in long positions were eroded, showing heavy bullish positioning prior to the sell-off.
Amid the sharp decrease, Bitcoin has recovered by about 5.52%, which indicates a potential short-term bottom to some traders.
Trader RidaaXBT recommended that Bitcoin could remain recovering toward the $69,000 to $70,000 zone, denoting that the liquidation sell-off may significantly lessen near-term selling pressure.
Meanwhile, ZordXBT stated that Bitcoin’s long lower wick is an indication of a major buying interest near the lows, typically interpreted as buying at lower levels.
Crypto trader Hitman42.eth also described that Bitcoin bullish participants may be re-entering the market, recommending that the recovery will back the rebuilding of long positions after the liquidation.
Furthermore, Bitcoin continues in a bear-flag breakdown based on the weekly chart, sustaining the threat of a further decline of roughly $50,000 to $52,000. The pattern comes after Bitcoin failed to regain the flag’s upper trend line, while increasing volume lend reinforces the bearish trend.
Overall, Bitcoin remains over its 200-week simple moving average (SMA) close to $61,800, a level that has notably a major cycle of bottoms in previous bear markets such as 2015, 2018, and 2020, although bearish cases have not yet been verified. A decisive rebound from this support could invalidate the bear flag breakdown and open the door for a move toward $70,000.
