$390 Billion Erased in One Week
Bitcoin’s slide below $60,000 this week sent shockwaves through the digital asset market, erasing nearly $390 billion in value and pushing total crypto capitalization just above $2 trillion. The scale of the decline is stark: the market’s peak last October was close to $4.2 trillion, meaning that more than half of the sector’s notional value has vanished in less than a year.
During this rout, bitcoin (BTC) dropped 17.3% and ether (ETH) plunged 22%, both on track for their worst weekly losses since November 2022—the month FTX collapsed and triggered widespread panic. According to coindesk.com, leveraged traders felt the pain acutely: about $7 billion in positions were liquidated across digital assets, with long bets accounting for $5.7 billion of those forced exits.
Spot bitcoin ETFs in the U.S. recorded $3.45 billion in outflows over eleven straight sessions.
Such rapid liquidations accelerate price drops as exchanges automatically sell assets to cover margin calls, fueling further volatility and deepening the market’s losses.
AI Boom Drains Crypto Speculation
While crypto prices tumbled, U.S. equities continued their upward march: the Nasdaq surged 34% and the S&P 500 climbed nearly 24% over the past year. This contrast highlights a subtle shift—speculative capital is flowing out of digital assets and into artificial intelligence ventures. Mati Greenspan of Quantum Economics points to blockbuster IPOs like Anthropic’s planned $50 billion raise, with a targeted valuation approaching $1 trillion, as a magnet for liquidity that previously fueled crypto rallies.
Michael Saylor, chairman of MicroStrategy, noted that capital markets have poured around $400 billion into AI over just six months—a scale dwarfing recent inflows into bitcoin ETFs. In fact, since May 14, spot bitcoin ETFs saw cumulative outflows of about $4 billion across eleven consecutive sessions. For many investors, AI’s promise appears to outweigh the current risk-reward profile of cryptocurrencies.
On paper, crypto should benefit from tech optimism—but in practice, AI is stealing the spotlight.
Memecoins Break Key Support Levels
The sell-off didn’t spare speculative favorites like Dogecoin (DOGE) and Shiba Inu (SHIB). As bitcoin approached $60,000, both tokens shed roughly 9% in value: DOGE fell from $0.0891 to $0.0830, breaking an ascending price channel that had held since February; SHIB dropped from $0.000004997 to $0.000004630, sinking below a critical support line at $0.000004780.
Notably, DOGE futures open interest declined sharply while SHIB open interest hovered near cycle lows—signs that traders are pulling back rather than buying the dip. Volume spikes during these breakdowns suggest capitulation rather than bargain-hunting. For DOGE specifically, losing its channel focus shifts attention toward lower supports near $0.067; for SHIB, persistent lower highs and lows keep it below every major moving average.
See Also
Bitcoin’s Losses Still Lag 2022 Bear Market
Despite this week’s dramatic declines and realized losses totaling approximately $174 billion since October’s top, bitcoin’s current bear market has not yet surpassed the pain seen in 2022. Back then, realized losses reached $211 billion—a record that remains intact for now. Realized loss refers to coins sold at a loss compared to their previous on-chain transaction price.
It is uncertain whether this cycle will see a similar “purge” before stabilizing or if investor behavior has fundamentally shifted due to higher overall market capitalization and broader participation compared to past cycles. The current bitcoin market cap remains higher in dollar terms than it did during the depths of the previous bear phase.
MicroStrategy made headlines by selling 32 BTC worth roughly $2.5 million—its first sale in nearly four years—adding another data point to a week defined by forced liquidations and shifting strategies among major holders.
What the market will watch
If Bitcoin breaks below the $60,000 threshold, especially with DOGE also falling under its $0.0819 support, traders will immediately look for further liquidations and potential moves toward lower support levels such as $0.067 for DOGE; whether realized losses in this bear market surpass the 2022 record of $211 billion remains unclear.
