Analysts at the crypto exchange Bybit have highlighted factors that contributed to bitcoin ($BTC) recording its worst single-week percentage decline since the FTX collapse in November 2022. According to the report, the decline was not triggered by random panic from the market, but was a result of a structural breakdown that had been building for weeks.
As reported in the Bybit Options Weekly Review, multiple forces hit simultaneously: stronger U.S. jobs data, record outflows from spot Bitcoin exchange-traded funds (ETFs), and Strategy challenging its “never sell $BTC” narrative.
$BTC Decline Signals Technical Breakdown
During the week ending June 8, $BTC fell from $73,760 to $59,130 for the first time since October 2024. Although a wave of dip-buying and short-covering quickly brought the asset’s price back above $61,000, the plunge signaled a technical breakdown that had been brewing beneath the surface.
Ether’s Relative Strength Index (RSI) fell to a reading of 12.78, which is the most extreme oversold reading in history. At the same time, bitcoin’s RSI also fell to 15.45 at the same time.
Combined, this is the most oversold signal this cycle has produced, indicating a market-wide capitulation event. Such moves indicate that investors are panic selling with no regard for prices. Although readings at these levels have historically preceded technical bounces, it does not confirm that the bottom is in.
No Bullish Reversal Confirmed
On the options market front, put options were delivered after a confirmed technical breakdown, and the Deribit Volatility Index (DVOL) spiked from historic lows near 35 to around 55. DVOL measures the 30-day annualized expected implied volatility for Bitcoin and Ethereum options. The metric provides real-time, forward-looking analysis of expected price swings, overall fear and greed, and market uncertainty.
The surge from 35 to 55 gave downside traders a double tailwind from both falling price and rising implied volatility. The metric is now pulling back from the spike and hovering around 48, indicating that the panic volume expansion is fading and the initial shock is absorbed.
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On the macro front, stronger U.S. jobs data reignited rate hike fears. With the current labor market strength ruling out any near-term dovish pivot, analysts see every positive employment print as a negative for risk assets that are priced on rate cut expectations.
Moreover, Strategy sold 32 $BTC for $2.5 million, breaking the “never sell” belief that gave holders their sense of structural security. Although the company has resumed buying, investors still appear concerned about the systemic signal behind the sale.
Bybit concluded by clarifying that although $BTC and $ETH are in extreme oversold conditions, the market has not confirmed a reversal. ETF outflows need to stabilize, and macro conditions need to be resolved before a positive outlook is assured.
