Bitcoin Falls Under $66,000 on ETF Outflows, Middle East Tensions

Bitcoin slipped below $66,000 on Tuesday, dropping to about $65,700 late in the session before recovering to roughly $66,460 by 1:00 a.m. ET Wednesday. The decline followed $519.2 million in net outflows from U.S. spot bitcoin exchange‑traded funds and came amid renewed tensions in the Middle East.

Ether fell about 7.1% to $1,849, BNB dropped roughly 7.2% to $635, Solana lost 7.7% and XRP declined 4.8% as liquidity tightened across major tokens.

U.S. spot bitcoin ETFs recorded their 12th consecutive day of net outflows on Tuesday. Spot Ethereum ETFs posted $90.2 million in net outflows, marking 16 straight days of withdrawals.

Dominick John, an analyst at Zeus Research, wrote that heavy institutional ETF outflows, aggressive long liquidations and broader macro de‑risking reduced liquidity across the crypto market. In his view, forced unwinds of leveraged positions amplified downward pressure on major crypto assets.

Renewed airstrikes in the Middle East pushed oil prices higher. West Texas Intermediate crude rose about 1.13% to $94.82 a barrel and Brent crude climbed roughly 1.04% to $97.07. Andri Fauzan Adziima, research lead at Bitrue Research Institute, wrote that higher oil prices intensified risk‑off sentiment, sparking large long liquidations and accelerating ETF outflows.

MicroStrategy disclosed it sold 32 BTC for roughly $2.5 million between May 26 and May 31, its first bitcoin sale since December 2022. Shares of the company’s Nasdaq‑listed stock fell about 9.2% on Tuesday and are down roughly 23% over the past month. Peter Chung, head of research at Presto Research, wrote that some traders are linking the small sale to bitcoin’s short‑term underperformance while others view the sale as a defensive action whose impact depends on market interpretation.

Asian equity markets moved unevenly alongside the shifts in risk appetite. Japan’s Nikkei 225 rose nearly 3% to an intraday record high, China’s CSI 300 gained about 1.1%, and Hong Kong’s Hang Seng fell about 1.6%.

Analysts gave differing timelines for a recovery. John forecasted that downward pressure on crypto could persist through June, while Adziima noted selling could ease within days to a couple of weeks if headlines calm or signs of de‑escalation appear.

The price swings combined ETF flow data, rising oil prices and a corporate bitcoin sale, all of which market participants cited as factors affecting trading and liquidity during the episode.