By Justin McQueen

June 9 (Reuters) - Bitcoin is undergoing its deepest drawdown from a rolling 1-year high since 2022, now down over 50% from the $125,000 peak. Recent price action has turned more disorderly, with losses accelerating to around 15% month-to-date, which accounts for more than half of the year-to-date decline of 28%.

The latest leg lower was triggered by headlines that Strategy – formerly MicroStrategy – had reduced its Bitcoin holdings. While the sale itself was small – 32 BTC – the signalling effect was more material given the firm’s long-standing “never sell” stance. Subsequent disclosure of renewed buying has done little to stabilise sentiment, with the market instead focusing on the shift in narrative.

Looking at prior cycles, the current drawdown has already exceeded the long-run average of around 38% since 2014. A move in line with the more severe episodes in 2018 (-83%) and 2022 (-77%) would imply downside towards the $22,000–$28,000 range.

However, the macro picture remains key. Both 2018 and 2022 drawdowns coincided with an active tightening cycle from the Federal Reserve. While we are not currently in a hiking phase, the recent repricing in inflation expectations alongside a firmer labour market has reintroduced upside risks to the rate path. Should the Fed shift toward signalling that policy tightening is on the table, this would likely reinforce downside in Bitcoin and raise the probability of a deeper, cycle-like drawdown.

In the short-run, BTC is testing the 200-week moving average at 61,976, which is a level that has historically acted as key structural support and will be closely watched for signs of base formation.
BTC drawdown


btc vs 200week ma


(Justin McQueen is a Reuters market analyst. (The views expressed are his own) ((Email: ))