Why did Bitcoin fall and what should investors expect next?

On June 5, for the first time since the beginning of the year, the price of the leading cryptocurrency, Bitcoin (BTC), fell below $60,000. This is its lowest level since February 2024.

As of June 11, after Bitcoin's decline, the price of the leading cryptocurrency partially recovered and returned to the $62,510 mark. Over the past week, Bitcoin's price has dropped by nearly 10%, and since the beginning of the year, it has declined by more than 30%.

Experts are already calling 2026 "one of the weakest years" for the first cryptocurrency and citing several reasons for Bitcoin's decline over the past few months.

Reasons for Bitcoin's decline and the current dynamics of the leading cryptocurrency

Bitcoin's market capitalization has fallen to a two-year low of $1.25 trillion. At one point, the figure even dropped below $1.2 trillion. Analysts attribute the latest Bitcoin decline to a number of factors, the main ones being:

• Geopolitical risks related to tensions in the Middle East;
• Rising inflation expectations;
• Capital outflows from BTC ETFs (exchange-traded Bitcoin funds).

Analysts note that the question of why Bitcoin is falling is not only related to internal cryptocurrency market issues. Against the backdrop of escalating tensions surrounding Iran, investors have become more cautious toward risky assets, including cryptocurrencies, technology stocks, and other highly volatile instruments. During such periods, capital often shifts into safer assets such as the U.S. dollar, government bonds, or gold. As a result, demand for BTC decreases, while additional market pressure intensifies Bitcoin's decline.

Bitcoin's price is falling amid capital outflows from Bitcoin funds, which reached $1.4 billion during the last week of May 2026. This was the highest figure in several months. According to Coinglass, these outflows reduced the market capitalization of Bitcoin funds to $102 billion.

According to experts, capital outflows from cryptocurrency funds, combined with Bitcoin's decline, indicate a significant negative trend — an overall decrease in institutional demand for the asset. If this trend continues, Bitcoin could keep falling in the near future.

Meanwhile, as Bitcoin falls, its share of the cryptocurrency market is also declining. According to Reuters, over the past year, BTC's share of the total crypto market capitalization has dropped from 63% to 56%, while the share of stablecoins has nearly doubled, rising from 7% to 13%.

The decline in institutional demand, together with rising inflation expectations, is closely linked to the conflict between the United States and Iran in the Middle East. Additional pressure contributing to Bitcoin's decline may also stem from concerns about rising energy prices.

Negative sentiment has also been fueled by statements from hedge fund manager Scott Bessent regarding the confiscation of cryptocurrency allegedly linked to Iranian authorities, valued at approximately $1 billion.

Experts also point to other external factors that contributed to Bitcoin's significant decline during the first two quarters of 2026. According to analysts at Go Invest, the artificial intelligence technology boom is putting additional pressure on Bitcoin's price.

Investors are reallocating assets into shares of technology companies directly or indirectly connected to the AI sector:

• Tech giants such as Alphabet, Tesla, Anthropic, and OpenAI;
• Manufacturers of chips and electronic components are required to build and maintain AI data centers (Nvidia, Samsung, Dell).

For example, according to Reuters, approximately $3.1 billion has been withdrawn from Bitcoin ETFs since the beginning of 2026, while the largest semiconductor-focused ETFs have attracted more than $21 billion.

As a result, growing investor interest in AI-related companies has become another reason for Bitcoin's decline in June 2026.

Reuters also notes that shares of U.S. chip manufacturers have risen by approximately 170% over the past year, while Bitcoin has fallen by roughly 40% during the same period. This further accelerates capital reallocation toward the AI sector.

The AI boom has also affected the mining industry. According to experts, miners are increasingly shifting from cryptocurrency mining to building data centers (DCs) for AI systems, which is one of the reasons Bitcoin's price is declining.

Analysts also point out that Bitcoin's hash rate (the network's total computing power) has fallen by 25% for the first time since September 2025 — from more than 1 zettahash per second to 883 exahashes per second.

According to analysts, a drop in Bitcoin's price below the $54,000 level could make mining unprofitable for certain mining equipment in specific regions.

Will Bitcoin continue falling?

Against the backdrop of Bitcoin's price decline, long-term holders (those holding coins for at least 155 days) are also exiting their positions, despite remaining relatively inactive from February through April 2026. In the first days of June, long-term holders sold approximately $2.4 billion worth of Bitcoin, contributing to Bitcoin's renewed decline. Notably, a significant portion of these investors purchased Bitcoin at prices above $90,000, making their current positions unprofitable.

Even Strategy sold 32 Bitcoins worth approximately $2.5 million at the end of May, marking its first Bitcoin sale in more than three years. Bitcoin's price fell to a local low almost immediately after news broke about the sale by Michael Saylor's company.

For the market, it is particularly significant that Bitcoin declined following Strategy's first BTC sale since 2022. Many investors viewed Michael Saylor's strategy as a symbol of long-term Bitcoin accumulation, so even a relatively small sale intensified negative market sentiment. On Polymarket, the probability that Strategy will sell at least part of its Bitcoin holdings is estimated at up to 84%.

Despite Bitcoin falling more than 50% from its all-time high reached in October 2025, Geoff Kendrick, Head of Digital Assets Research at Standard Chartered, maintains his forecast that BTC could reach $100,000 by the end of 2026, believing that the main wave of selling may be nearing its end.

Concerns about further declines in Bitcoin's price are reinforced by weak U.S. inflation data, which reduces the likelihood of additional interest-rate cuts by the U.S. Federal Reserve (Fed). Historically, Bitcoin's value tends to fall when the Fed raises interest rates and rise when rates are lowered.

The macroeconomic reason for Bitcoin's decline intensified on June 10, when Reuters reported that the U.S. Consumer Price Index (CPI) for May 2026 increased by 4.2% year-over-year — the highest level in the past three years. This strengthened expectations that the Federal Reserve will keep interest rates elevated.

Pressure on Bitcoin's price could also increase due to legal uncertainty, as one of the cryptocurrency market's most anticipated legislative proposals, the CLARITY Act, which aims to regulate digital assets in the United States, is struggling to gain approval in the Senate.