Strategy’s sale of 32 Bitcoin was immaterial in size but not in signal, according to market-making firm Wintermute. The disclosure removed the last reason for bulls to hold on in a market already experiencing bleeding flows. Wintermute noted that while Strategy had been an overhang for a month, the sale forced a reckoning the market needed to work through anyway.

Bitcoin’s bid had thinned for weeks, with retail selling crypto to chase equities and US institutions turning bearish. On Wintermute’s OTC desk, retail has been a net seller for weeks, while US institutions turned bearish over the past few days. Asia and Europe remained balanced. Exchange Traded Fund (ETF) data reinforced this picture, with May recording $2.43 billion in net outflows, marking the worst month of 2026.

Market Impact and Macroeconomic Factors

The macro backdrop compounded the pressure on risk assets. The US added 172,000 jobs in May against 80,000 expected, with April revised sharply higher. Job openings hit 7.6 million, the highest in nearly two years, and ISM services prices reached their highest level since August 2022. Consequently, the 10-year yield climbed to 4.55%.

Wintermute observed that strong economic data in this rate environment eliminates any near-term case for Federal Reserve cuts and keeps the restrictive path intact. The Nasdaq fell 4.7% on the week, and the S&P posted its first weekly loss since March as AI names declined alongside crypto.

Analyst Perspectives on Market Bottom

Anthony Pompliano argued on CNBC that bear markets are becoming shallower each cycle and current metrics historically signal proximity to a bottom. He noted that the percentage of Bitcoin held at a loss now exceeds the percentage held at a profit, a signal that has marked prior cycle lows.

Pompliano pointed to Strategy and Strive’s dollar reserves as structural protection against forced selling. He argued both companies built cash buffers specifically to cover dividend obligations without touching their Bitcoin holdings through a downturn.

Bitcoin's recent decline has pushed on-chain valuation metrics into undervalued territory, though the asset remains more expensive than at prior cycle bottoms, according to Grayscale Research. Head of Research Zach Pandl stated on June 9 that a composite valuation model combining three separate on-chain measures indicates Bitcoin is now trading below its long-term fair value after falling to a new cycle low.

Valuation Signals and Market Maturity

While the metrics suggest undervaluation relative to historical averages, the signal is not as extreme as levels seen during major market capitulation events, such as the collapse of crypto exchange FTX in 2022. Grayscale attributes this moderation to a less severe preceding bull cycle and structural improvements across the asset class. These improvements include the expansion of exchange-traded products, broader deployment across wealth management platforms, and increasing institutional adoption.

Key Catalysts for Recovery

Determining whether the market has found a definitive bottom depends on two near-term factors. The first is progress on the CLARITY Act, proposed legislation aimed at establishing a clearer regulatory framework for digital assets in the U.S. While Grayscale remains optimistic about the bill's prospects, prediction markets indicate the outcome remains uncertain. The second factor involves highly leveraged Bitcoin holders and whether they can successfully stabilize their balance sheets during the ongoing downturn. Pandl suggested that dollar-cost averaging may make sense for long-term investors seeking exposure at discounted valuations.