BTC falls below $62,400 as Strategy concerns trigger fourth consecutive day of sell pressure

Strategy and miners at the forefront of the sell-off

Worries surrounding Strategy, the company led by Michael Saylor and known for holding a sizable BTC reserve, were a key driver behind this market weakness. Investors grew increasingly concerned about the company’s dividend-paying preferred shares, known as STRC, and speculated that Strategy might be forced to sell some of its BTC holdings to stabilize its structure.

Analysts noted that STRC, the preferred share for publicly traded Strategy, has dropped below face value, fueling expectations that the company could resort to selling its BTC assets to defend its capital position if required.

According to Marex analysts, the pressure does not solely stem from Strategy. BTC has traded below its estimated production cost of $78,000 for five consecutive months, putting financially vulnerable miners under strain. This scenario has highlighted two potential sources of further selling: institutional BTC holders and miners squeezed by ongoing losses.

Derivatives data signals strengthening bearish sentiment

Market risk appetite took another hit following the US Federal Reserve’s meeting on Wednesday, with the impact quickly spreading to the derivatives markets. Over $450 million in leveraged positions were liquidated in the past 24 hours, the majority belonging to bullish bets. This development has intensified pressure on traders holding long positions.

While open interest in BTC and ETH futures saw little change, SOL futures open interest surged above 70 million tokens, nearing the all-time high of 71.57 million set on June 5. Open positions in XRP futures also climbed to their highest levels since October last year.

Funding rates for several tokens remained near zero or in negative territory, pointing to persistent bearishness. Funding on ADA, XLM, and BCH fell into the minus 20% to minus 30% range. Throughout trading streams, aggressive market selling continued to move prices downward, a trend present since at least Wednesday.

Options market weighs $52,000 scenario

BTC options activity revealed growing demand for protective put contracts, indicating that investors are hedging against the possibility of the price sliding to $52,000 or lower in the coming weeks. Supporting this outlook, the one-week 25-delta skew for put options has surged past the 10% volatility premium threshold.

LAB token defies the trend and prompts debate

Despite widespread market weakness, LAB token recorded an eye-catching rise. LAB serves as the native digital asset for the LAB Terminal, a high-performance trading infrastructure accessible via browser or plugin. Over the past week, LAB surged 57%, with a 92% monthly gain. In April, it climbed 250%; in May, 900%; and in March, 78%.

Glossary: Market making refers to the activity of continuously quoting buy and sell prices to ensure smoother trading in an asset. Vesting means the gradual release of tokens allocated to teams, investors, or advisors according to a set schedule.

However, the reasons behind LAB’s rally remain unclear. Blockchain investigator ZachXBT claimed that 95% of the token supply is held by internal groups. He also alleged the simultaneous use of four tactics: high-interest over-the-counter loans, unilateral vesting extensions, delayed or withheld market rewards, and undisclosed market making agreements.