Bitcoin drops near $58K as US dollar hits 40-year high against yen

Bitcoin fell toward $58,000 on Tuesday as the US dollar surged to its highest against the yen since 1986, pressuring risk assets across the board.

Bitcoin fell 3% to $58,453 during the Wall Street open on June 30 as the US dollar hit 162.50 against the yen, its highest since 1986.

"The bear market is well advanced, but it is hard to say a true bottom is in," Wintermute, a crypto market maker, said on X. The firm pointed to $1.8 billion in Bitcoin ETF outflows last week and a Fear & Greed Index stuck at 18 to 24.

Open interest surged as traders added long positions into the dip, according to Coinglass data. CryptoQuant data showed exchange inflows rising sharply for coins held six to 12 months — those most likely accumulated near the 2025 cycle highs — consistent with capitulation among cycle-top buyers.

The divergence from equities is widening. The S&P 500 gained 14% in Q2, its best quarter since 2020, while Bitcoin is on track for a nearly 20% loss. The next key support sits at $58,000, with the 200-week moving average also in play. A break below could open a move toward $55,000, Wintermute said.

$420M in Longs Liquidated as Dollar Strength Weighs

More than $420 million in long positions were liquidated across centralized exchanges in the past 24 hours, Coinglass data shows, as the dollar's rally forced deleveraging across crypto derivatives markets. The dollar-yen pair's surge to 162.50 raises the odds of intervention by the Bank of Japan, which could trigger a sharp dollar pullback and a relief rally in risk assets, analysts said.

"You've got dollar liabilities and not enough dollars. So you sell assets to get dollars, putting downward pressure on the asset. Yen, rupees, won, or Bitcoin," George Gammon, an analyst and YouTube personality, said on X.

Strategy (MSTR) lost nearly 7%, giving back Monday's relief rally after the company unveiled a framework allowing it to sell up to $1.25 billion of bitcoin from its treasury under certain conditions. The firm's preferred shares fell 1% to 4% across the stack. Circle (CRCL) led losses among crypto stocks, extending its decline to 13%, while Coinbase (COIN) slipped 4% and Galaxy (GLXY) fell nearly 5%.

Capitulation Signal Echoes Past Cycle Bottoms

CryptoQuant data shows onchain movements increasingly involving coins that last moved near all-time highs, alongside rising exchange inflows. The share of Bitcoin supply held at a loss is approaching 50%, Wintermute noted. In past cycles, similar conditions emerged near market bottoms, though the loss-making supply share often climbed to around 60% before a durable recovery.

"For some, this will be a painful stretch. That said, capitulation events of this kind among cycle-top investors have historically coincided with long-term bottom formation, a pattern observed in both the 2018 and 2022 cycles," CryptoQuant contributor Crypto Sunmoon wrote.

Wintermute said a durable bottom is unlikely to form easily during summer's thin trading conditions, with additional pressure likely to persist through September or October. Key variables to watch include the US jobs report, whether Bitcoin can hold its 200-week moving average and the $58,000 level, and trading in Strategy's preferred shares.

This article is for informational purposes only and does not constitute investment advice.