The Stress Test: $800 Million Liquidated, $10 Billion Options Expiring

After yesterday's stress test, BTC still could not hold the key level and is now sitting near $59,000. Within 24 hours, roughly $800 million in long positions were liquidated across the market, and today about $10 billion in BTC options are expiring.

I posted a short video last night and many of you asked for more detail. Some think this is just another familiar liquidation shakeout, but I see clear differences in how this decline is unfolding.

Three Signals That Worry Me Most

First, retail is absent. In almost ten years in this space, past declines usually brought retail buyers rushing in to bottom-fish. They would buy high, cut losses, then want back in. This time that retail bid is mostly missing. My own messages show fewer and fewer people asking questions; enthusiasm is wearing thin.

Second, ETFs have become amplifiers. Spot Bitcoin ETFs have now seen over $6 billion in outflows, the longest streak since 2024. ETFs are a double-edged sword: when sentiment weakens, they push the market further down, and once outflows start, volatility expands.

Third, AI is draining capital. US hyperscalers are expected to invest over $700 billion in AI infrastructure this year. That is enough to reshuffle the entire crypto market. Risk assets and high-growth stocks are one basket, and the sellers are often the same holders looking for yield elsewhere. Money does not disappear, it just moves from one pocket to another.

Two More Arrows: A Hawkish Fed and Strategy Under Pressure

Many analysts and economists now expect two more rate hikes this year. That means the liquidity that has supported risk assets since 2020 may start to wobble. The script of Fed easing and BTC climbing higher is being questioned.

Strategy's common stock has fallen for six consecutive trading days, reaching levels last seen in February 2024. Its preferred securities now show a yield around 14%. That adds another layer of stress.

Retail absent, ETF outflows, AI competition, Fed hawkishness, and Strategy trouble: five arrows hitting at once.

Why the Bottom May Already Be Forming

Look at long-term holders: they now control about 78% of supply. The amount of coins that can realistically be dumped is shrinking. Long-term holders have either locked their coins away or already absorbed what they wanted. The sellers still active are running out of bullets.

Around $60,000, there is defense. Purely from sentiment, $60k has been touched repeatedly and bounced. When it dips, someone buys; when it bounces, few chase. Sell pressure sits above, bottom fishers wait below.

I saw this same feeling in late 2021 and late 2022. The bottom is still in the process of forming rather than a finished event.

Big money is changing hands. Selling is being absorbed gradually. Coins are moving from short-term holders to long-term holders. Once that transfer completes, the script flips: from intense selling to gradual absorption, from most circulating supply changing hands to demand turning. That is the script of a major bottom.

The Regulatory Wildcard: Clarity Act and Institutional Access

The Clarity Act would make the CFTC the primary regulator for most digital asset markets, while the SEC keeps authority over digital securities. In plain words, it clarifies who regulates what.

A Galaxy executive put it well: Washington is in a tactical phase. There are lawmakers pushing bills, and there is legislative debate; these forces are colliding. Regulators are still feeling out the framework rather than trying to kill the industry.

Fundamentals will not wait. Once a bill like this passes, digital assets get a clearer framework, and institutional capital gets a green light for large-scale entry. Over the next few months I will watch this closely, because BTC's next wave needs institutional capital and regulatory clarity.

Conviction After Nearly Ten Years in Crypto

Five forces are pulling at once, and the market is messy. I am not worried. I have been in this space nearly ten years. 2021 had deep losses, 2022 had overnight crashes. Every time fundamentals looked hopeless, the real bottom formed. BTC has survived regulatory crackdowns, exchange failures, protocol failures, and the Three Arrows liquidation. Every time people shouted Bitcoin is dead, it lived.

I remain long-term bullish on BTC. I believe it will change global finance. That conviction is based on fundamentals, on the long-term thesis, and on watching this asset survive repeated storms. FUD can hit hard, but the long-term structure remains.

The Bottom Is Closer, But Answer Three Questions First

The five arrows are real, but the supply transfer tells me the bottom is closer than the panic suggests. Retail exhaustion, ETF outflows, AI competition, Fed hawkishness, and Strategy stress all point to maximum discomfort, and maximum discomfort is where bottoms form.

Before acting, ask yourself three questions. Why am I buying this asset? Is it the application, the narrative, or just because others are buying? How long do I plan to hold? If it drops another 30% tomorrow, can I still sleep?

Answer honestly, take responsibility for your judgment, and do your own research.