Bitcoin Market Crash Traced to High Leverage and Rare BTC Sale

The recent crypto market crash has left investors reeling, with Bitcoin briefly breaking below $66,000. But what caused this sudden downturn? An examination of the data reveals a complex interplay between high leverage in the derivatives market and a rare sale of Bitcoin by corporate holder Strategy.

According to on-chain data, the leverage ratio had been climbing for days, reaching levels not seen since October 2025. This was accompanied by a spike in funding rates, which indicate that long traders were paying short traders to hold their bets. The market was already leaning long and over-leveraged, making it ripe for a correction.

And then came the rare sale of Bitcoin by Strategy on June 1. For a firm known only for buying, this reversal hit sentiment hard, sparking a wave of selling that led to the crash. The sell-off was not limited to derivatives; spot Bitcoin moving onto exchanges spiked on June 2, with over 58,000 BTC inflowing into exchanges.

The selling pressure was even higher than before the October 2025 Black Friday crash, when the same leverage ratio peaked at around 2.73%. The combination of high leverage and real coins hitting exchanges together set off the crypto crash cascade. Whales and sharks dumped over 24,000 BTC in the past week alone, while micro traders added only a handful of coins.