Lekker Capital's Quinn Thompson advises investors to avoid the crypto market for the summer and return in late Q3. This recommendation is driven by record IPO supply, waning liquidity, and unresolved problems at Strategy and Bitmine. Thompson's bearish case rests on three overlapping pressures hitting the market simultaneously.

SpaceX, Anthropic, and OpenAI are collectively bringing more than $3 trillion in new IPO supply to market, competing directly with existing tech names for capital. The Mag7 stocks that historically lead bull markets are lagging while the rest of the Nasdaq carries the index, a pattern Thompson describes as classic late-cycle behavior. Meanwhile, STRC is approaching one of its worst drawdowns since launch, and Thompson expects Strategy to raise its dividend by 50 basis points rather than the usual 25, adding to its cash obligations.

Thompson identified a prisoner's dilemma facing major cloud companies. If they keep spending on AI infrastructure, free cash flow and buybacks decline and their equities lag. If they cut spending to restore balance sheets, semiconductor and AI supply chain names crash, taking the broader tech index down with them. Either path leads to lower tech prices, which removes capital that would otherwise flow into Bitcoin and crypto.

Thompson pointed to 140-plus activist groups across 24 states already blocking over $64 billion in data center development. He also noted Trump previously signaled tech companies should pay for their own power costs, a message he expects to return ahead of midterms.

Thompson flagged one additional risk. USDJPY is approaching its fourth highest weekly close in nearly 50 years, with a Bank of Japan meeting scheduled the day before the June FOMC. If Japan does not use that window to strengthen the yen, Thompson expects a breakout above 160, which Japanese policymakers will strongly want to avoid and which could trigger volatility across all risk assets at once.

Bitcoin fell below $62,000 on Tuesday amid a macro-driven risk-off move that pushed market sentiment deeper into extreme fear. The decline follows a period of volatility where the cryptocurrency previously recovered to $63,310 after a chaotic weekend erased approximately $390 billion in market value. The recent sell-off has intensified, with data showing 132,341 traders liquidated in the past 24 hours for a total of $449.76 million.

Market Liquidations and ETF Flows

The selling pressure has resulted in significant leverage being flushed from the system. Coinglass data indicates that the liquidations in the last day reached nearly $450 million, adding to the previous $7 billion in leveraged positions wiped out during the earlier weekend sell-off. Exchange-traded fund flows showed a divergence in investor sentiment; spot Bitcoin ETFs experienced net outflows of $91.4 million on Monday, while spot Ethereum ETFs saw net inflows of $82.4 million.

Technical Levels and Trader Sentiment

Bitcoin is currently testing critical support zones after briefly breaking below its 200-week simple moving average during the prior Friday sell-off. Trader Dom noted that Bitcoin's aggregated spot flow momentum dropped to its weakest level since the FTX collapse, marking the most intense selling pressure in nearly four years. Altcoin Sherpa indicated that while a relief bounce is possible, extended sideways price action without a recovery could increase the risk of another move lower. Castillo Trading expects crypto markets to remain choppy and range-bound through the summer, with Q4 viewed as the more likely period for a sustained trend.