Bitcoin Broke Down — But $1.17 Billion In Shorts Above Price Says Bear Trap

What Happened

Two forces drove the rout. Investors questioned heavy AI spending, and they raised bets on higher interest rates. The Federal Reserve held rates at 3.50% to 3.75% on June 17, but its new projections point to at least one hike in 2026.

The Coinbase Premium Index, which measures how much US investors on Coinbase pay versus offshore exchanges, fell to about -0.14 on June 23. That is down from -0.04 on June 13, a sharp deepening of the discount in under two weeks.

Market Context

Bitcoin (BTC) price fell about 5% over the past week as a sliding Nasdaq dragged risk assets lower, and any bullish Bitcoin price prediction now depends on whether cooling US demand can recover.

The drop pushed BTC into a confirmed bearish chart pattern. Yet a lopsided derivatives setup and thin selling volume suggest the breakdown may not hold. The shared trigger sits in Washington, not just crypto.

That hawkish shift lifted the US 10-year Treasury yield, the benchmark rate that prices most risk assets, to around 4.5%. Rising yields pull money out of risk assets.

On the 12-hour timeframe, Bitcoin has broken a head and shoulders, a topping pattern where a higher middle peak sits between two lower peaks. The breakdown came on fading sell volume, which keeps recovery hopes alive.

The index is now approaching its late-May local low near -0.17. On the two recent visits to local lows, around May 27 and early February, the discount marked local demand bottoms. Each time, the BTC price slid roughly 14% to 18% into a low before buyers returned.

The broader trend stays bearish. Bitcoin has traded under a Bitcoin death cross since November 16, now 220 days, where the 50-day Simple Moving Average (SMA), the average closing price over the past 50 days, sits below the slower 200-day SMA. A Simple Moving Average (SMA) is the average closing price over a set number of days.

Both averages remain above the current price, and BTC has not reclaimed the 200-day line across the entire stretch. Price keeps trading under the cross.

Why It Matters

The same risk-off retreat pulling buyers out of tech is therefore bleeding into Bitcoin. That broad weakness now shows on the chart.

A negative reading suggests US spot buyers are stepping back, possibly the same risk-off reflex hitting tech.

Every time Bitcoin lost the 50-day SMA, declines followed. It reclaimed the line in early January, then lost it and fell about 33%. A late-March loss proved milder at around 6%. The late-May loss brought a roughly 23% drop.

That late-May slide has now carved a local bottom. A bottoming attempt often sets up a push back toward the 50-day SMA, which fits the bear-trap case building in the derivatives data.

Details

Bitcoin Tracks the Nasdaq Today as Rate-Hike Fears Hit Both

The Nasdaq today was bleeding. The Nasdaq Composite closed at 25,587 on June 23, down about 2% on the day and roughly 4% over five sessions. Alphabet sank 6% and chip names like Micron fell more than 10%.

The yield move hits Bitcoin directly. BTC and the 10-year yield carry a 30-day return correlation of about -0.315, a moderate negative read, so they tend to move in opposite directions. Higher yields therefore weigh on BTC.

Bitcoin also moves with tech. BTC and the Nasdaq hold a positive 30-day correlation near 0.451, meaning they tend to fall and rise together. So as higher yields drag tech lower, Bitcoin follows it down.

That link explains the relative weakness. Bitcoin fell about 5% while the Nasdaq lost about 4%, so BTC is lagging the selloff rather than leading any recovery.

Whether US buyers are pulling back specifically from BTC, and not just tech, however, needs a direct demand gauge.

US Demand Cools as the Coinbase Premium Index Slides

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Deeply negative demand readings have historically confirmed fresh lows and bear traps, often led by short squeezes. The longer-term trend, however, still leans against the bulls.

Death Cross Holds as a Fresh Bottom Forms

Will Bitcoin Go Back Up? Short Bets Pile Up for a Squeeze