Author: Ariel, CryptoCity
Bitcoin’s Recent Plunge: Michael Saylor Points to AI Capital Rotation as On-Chain Data Reveals Deeper Market Shifts
Bitcoin has recently experienced a significant downturn, shedding 22.7% of its value over the past four weeks. This decline, coupled with a minor sale of Bitcoin by MicroStrategy, has fueled investor apprehension. However, MicroStrategy founder Michael Saylor offers a distinct perspective, attributing the dip primarily to a massive influx of capital into artificial intelligence (AI) infrastructure, characterizing it as a mere capital rotation rather than an asset impairment. Conversely, a more pessimistic camp fears a fundamental market malfunction.
To provide a clearer understanding of the evolving market structure, leading on-chain analytics firms Glassnode and CryptoQuant, through its CEO Ki Young Ju, have delved into the data, offering critical insights into the current landscape.
Capital Rotation or Market Failure? Saylor vs. The Pessimists
In a recent social media post, Michael Saylor explained his view on Bitcoin’s recent depreciation. He highlighted that over the past six months, capital markets have injected an estimated $400 billion into AI development. Concurrently, spot Bitcoin ETFs have witnessed approximately $4 billion in outflows since May 14, putting downward pressure on Bitcoin’s price.
Saylor firmly asserts that this phenomenon is a “capital rotation,” emphasizing that the asset’s intrinsic value remains unimpaired and that market volatility inherently creates new opportunities.
Capital markets are funding the AI buildout at historic scale: ~$400B over 6 months. Bitcoin ETFs have seen ~$4B of outflows since May 14, pressuring $BTC. This is a capital rotation, not a Bitcoin impairment. Volatility creates opportunity.
— Michael Saylor (@saylor) June 4, 2026
However, MicroStrategy’s recent sale of 32 Bitcoins, though a minuscule fraction of its vast holdings (the company still holds 843,706 BTC), amplified bearish sentiment. Anonymous trader QE Infinity, for instance, declared on X that Bitcoin had “failed,” even citing Saylor’s company selling as evidence. This pessimistic view points to MicroStrategy’s sale, persistent ETF outflows, and Bitcoin’s underperformance despite record highs in US equities as clear signals of market dysfunction.
Glassnode’s On-Chain Analysis: Unpacking Bitcoin’s Market Structure
Beyond the macro-level explanations offered by prominent figures, a deeper look into on-chain data reveals significant shifts in Bitcoin’s market structure.
According to a report by Glassnode, as of June 3rd, Bitcoin had declined by 13% over the preceding seven days, settling at a midpoint between its realized price and the actual market average. Crucially, the short-term holder cost basis fell below the realized price for the first time since January 2022, a strong indicator of a late-stage bear market. Key on-chain metrics supporting this assessment include:
- Realized Profit/Loss Ratio: The 7-day moving average plummeted from 3.16 to 0.29, mirroring panic levels seen in February. The 90-day moving average failing to breach 2 further suggests that the previous rally to $82,000 was merely a bear market bounce, not a sustained recovery.
- Daily Realized Losses: Bitcoin is currently experiencing daily realized losses amounting to $1.35 billion. A significant portion, $770 million, originates from long-term holders capitulating at the cycle’s peak, indicating an ongoing redistribution of supply.
- Spot Resistance Overhead: Bitcoin encountered precise rejection near the $83,000 mark, which represents the cost basis for US spot ETF investors. This has pushed these investors back into unrealized losses and firmly established a significant resistance level above the current price.
Market Makers Remain Defensive with Hedging Strategies
Analyzing trading volumes further reinforces the prevailing market sentiment. The 7-day spot volume delta for Bitcoin has turned negative, reaching a new low reminiscent of February, signaling a market dominated by sellers. While implied volatility continues to contract, options pricing indicates higher future volatility compared to recent market activity, leading to an expanding volatility risk premium.
Within the options market, the Delta Skew metric remains firmly in the put option premium area. This signifies that investors are currently willing to pay more for bearish put options, reflecting a predominantly defensive market sentiment. However, despite the downturn, there hasn’t been a dramatic expansion in demand for aggressive downside hedging.
Market makers, critical providers of liquidity, have concentrated their contracts and capital around Bitcoin’s current price region. Bitcoin is currently situated in a maximum negative Gamma area, indicating that most active orders in the market are primarily focused on purchasing insurance—that is, protecting against further downside risk.
Bitcoin Undergoes Drastic Reshuffling, Price Returns to Square One
This cycle has also brought about fascinating shifts in Bitcoin’s ownership structure, or “chip distribution.”
Ki Young Ju, CEO of on-chain analytics firm CryptoQuant, highlights a significant transformation: wallets that entered this cycle and have held Bitcoin for 6 months to 2 years now control 53% of the realized market capitalization. This is a substantial increase from just 15% two years ago. Historically, this metric typically bottoms out around 68%, suggesting that short-term holders are gradually transitioning into long-term holders.
Ki Young Ju further notes that this distribution phase indicates a massive change of hands for Bitcoin. The average investor cost basis currently stands at approximately $53,000. While historically bear markets often conclude after prices break below the realized price, the current market is experiencing intense selling pressure.
Ki Young Ju’s statistics reveal a compelling narrative:
- Since January 2023, MicroStrategy has acquired 711,206 Bitcoins while selling only 32, effectively removing 711,174 Bitcoins from market circulation.
- As of March 2024, when Bitcoin was priced at $63,000, spot ETFs absorbed 509,102 Bitcoins, and MicroStrategy purchased an additional 650,706 Bitcoins.
Collectively, despite the absorption of over 1.24 million Bitcoins by spot ETFs and MicroStrategy during this cycle, the price has returned to its starting point. This stark divergence underscores the extremely drastic reshuffling of capital and ownership occurring within the Bitcoin market.
(The above content is an authorized excerpt and reproduction from our partner “CryptoCity”, original link)
Disclaimer: This article is for market information purposes only. All content and views are for reference only and do not constitute investment advice. They do not represent the views or positions of BlockTempo. Investors should make their own decisions and transactions. The author and BlockTempo will not bear any responsibility for direct or indirect losses incurred by investors’ transactions.
