TL;DR

Bitcoin fell below $62,000 by Thursday morning, hitting its weakest level since before the US-Iran war began in late February. Nasdaq 100 and S&P 500 futures extended Wednesday's losses into the market open. WTI crude held near $95 per barrel as ceasefire doubts resurfaced overnight. The sell-off is cross-asset and traces back to a single catalyst: renewed escalation risk in the Iran conflict and the inflation pressure it sustains.

What Happened: Bitcoin Falls to 4-Month Low

By 7:40 a.m. ET on June 4, Bitcoin had declined to $62,257, its lowest level since late January, before the US-Iran conflict erupted. Bloomberg described the move as Bitcoin's weakest price in almost four months. Ethereum fell alongside it, touching $1,740 in early Thursday trading, down from $1,810 at Wednesday's open.

In equity markets, Nasdaq 100 and S&P 500 futures pointed lower at the open while Dow Jones futures held near flat. The Dow had already shed more than 600 points in overnight moves after three consecutive sessions of broad equity losses. Six of the eleven S&P 500 sectors closed lower on Wednesday, led by technology, financials, and consumer discretionary. On Thursday morning, TheStreet reported that Nasdaq futures in particular extended the prior session's pullback.

Two overnight developments deepened the risk-off tone. President Trump told the Wall Street Journal that he would consider ending the conditional ceasefire with Iran if any American troops were killed, reintroducing explicit escalation risk into markets that had briefly priced in peace-deal progress. Reuters confirmed fresh Israeli strikes in southern Lebanon in the early hours of Thursday, signaling that hostilities continue despite an Israeli-Lebanese ceasefire extension announced the day before. For background on Wednesday's brief oil easing and Hormuz reopening hopes, see our earlier post: Oil Eases From Near $97 as Israel-Lebanon Ceasefire Raises Hormuz Reopening Hopes.

Why Bitcoin and Markets Moved Lower

The US-Iran conflict, now in its fourth month, has created reinforcing pressures across oil, crypto, and equities that converged sharply this week.

For oil, the structural constraint is the Strait of Hormuz. The strait handles roughly 20 to 25 percent of global seaborne oil and liquefied natural gas (LNG), but vessel traffic has fallen to approximately five percent of pre-conflict levels, according to the UK Parliament's House of Commons Library. A sixth consecutive weekly draw in U.S. crude stockpiles, reported by the Energy Information Administration, added further upward pressure. WTI (West Texas Intermediate, the U.S. crude oil benchmark) held at $95.24 per barrel Thursday morning; Brent (the international crude benchmark) traded near $96.92.

For Bitcoin, three factors compounded the conflict-related risk aversion. Strategy (formerly MicroStrategy), the largest publicly listed corporate Bitcoin holder, sold a portion of its holdings earlier this week. Spot Bitcoin ETFs (exchange-traded funds that hold actual Bitcoin) recorded 13 consecutive days of net outflows totaling approximately $3.4 billion. Roughly $1.76 billion in leveraged crypto positions were liquidated as prices fell through key support levels. In our analysis of institutional rotation cycles at ChartDojo, extended ETF outflow runs of this length have historically required a clear shift in the macro catalyst before sustained recoveries emerge. That shift requires either a credible Iran ceasefire or a meaningful change in Fed rate-cut expectations, and neither has appeared.

For equities, the oil-inflation connection is the transmission mechanism. Higher oil feeds into consumer price inflation, which tightens the Federal Reserve's room to cut interest rates. Technology stocks, which drove the AI-led equity rally in recent months, carry high valuation multiples that are sensitive to that kind of rate repricing. Broadcom's AI chip guidance this week also disappointed, adding a sector-specific headwind on top of the broader macro pressure.

Implications for Traders

Equities and Index Futures

Thursday's session open will show whether macro-driven selling accelerates or stabilizes near current levels. The Nasdaq 100's concentration in high-multiple technology names makes it more vulnerable than the Dow in this environment. A close below Wednesday's lows would mark four consecutive days of broad losses and could intensify selling pressure heading into Friday.

Oil and Energy Futures

The Iran war premium in WTI and Brent has been persistent but rangebound in the $93 to $97 area. A credible Hormuz reopening announcement could remove $10 to $15 from that premium quickly. A direct incident near the strait would push WTI above $100. The EIA's sixth consecutive stock draw provides a secondary supply-side floor under prices independent of geopolitical risk.

Crypto Traders

Bitcoin is approaching the psychologically significant $60,000 level. CNBC reported that derivatives traders are pricing in roughly an 80 percent probability that Bitcoin will trade below $60,000 at some point this year. Ethereum at $1,740 faces the same macro headwinds without a separate institutional demand narrative to attract distinct buyers at this stage.

Potential Positives vs Negatives

Positives: The House war powers resolution passed 215 to 208 on June 3, reflecting bipartisan pressure on the Trump administration to pursue a negotiated settlement. A credible ceasefire announcement would simultaneously ease oil prices, improve inflation expectations, reduce the Fed's constraint, and trigger a broad risk-on recovery across equities and crypto. The Israel-Lebanon ceasefire extension, if it holds, could serve as a diplomatic template for wider de-escalation.

Negatives: Trump's stated condition for maintaining the ceasefire (no American troop casualties) is effectively unpredictable. Iran's supreme leader signaled a hardened posture Wednesday. The Strait of Hormuz remains effectively closed, and supply-chain disruption takes time to reverse even after a formal ceasefire. Bitcoin's ETF outflow streak shows no sign of reversing yet.

What Could Happen From Here

Base scenario (most likely): Markets hold in a rangebound, risk-off posture. Oil stays above $90, equities oscillate without making new highs, and Bitcoin trades between $60,000 and $65,000. Catalyst that confirms this: no substantive ceasefire progress by end of week. Catalyst that invalidates it: a direct, confirmed ceasefire announcement from both governments.

Upside scenario: A credible ceasefire with a Hormuz reopening timeline triggers an equity rally of two to four percent, oil pulls back toward $85 to $90, and Bitcoin bounces toward $68,000 to $70,000. Catalyst that confirms: official announcement with a specific reopening date. Catalyst that invalidates: renewed strikes near the strait within 48 hours.

Downside scenario: Trump ends the ceasefire or a Hormuz incident occurs. WTI pushes above $100, equities fall sharply (Dow down two to three percent or more), and Bitcoin breaks below $60,000. Catalyst that confirms: confirmed American troop casualties or a direct attack on Hormuz shipping infrastructure. Catalyst that invalidates: rapid third-party diplomatic intervention.

What to Watch Next (Next 24 Hours)

  • Hormuz incident reports: Any confirmed strike near the strait would immediately push WTI above $100 and extend the equity and crypto sell-off.
  • White House ceasefire statements: Following Trump's WSJ remarks, any follow-up statement on ceasefire conditions will move markets quickly.
  • Bitcoin at $60,000: Whether Bitcoin holds above or breaks the psychological floor will set the tone for leveraged traders still holding long positions.
  • Spot Bitcoin ETF daily flows: Data from issuers will confirm whether the 13-day outflow streak is pausing or extending.
  • Nasdaq open price action: The first 30 minutes of Thursday's regular session will show whether institutional sellers are continuing to reduce risk or beginning to rotate back in.

FAQ

Why is Bitcoin selling off alongside equities?
Both are reacting to the same underlying force. The US-Iran conflict sustains oil prices, which feeds into inflation, which reduces the probability of Federal Reserve rate cuts. Risk-averse investors reduce exposure to speculative assets including both high-multiple tech stocks and cryptocurrencies in parallel.

What would it take for Bitcoin to recover from these levels?
A credible ceasefire announcement with a Hormuz reopening timeline would reduce inflation risk and likely revive risk appetite across asset classes. A pause in spot Bitcoin ETF outflows could provide a more immediate near-term floor, even without a full macro catalyst shift.

Sources

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Header image source: pexels by Marnie Griffiths. License: PEXELS.