Bitcoin has re-entered a 'distribution phase' as its price slips below the $70,000 mark. This movement is accompanied by signals of rising losses and increased exchange inflows, indicating a potential shift in market dynamics. The prevailing sentiment is one of 'extreme fear' gripping the broader crypto market, as investors react to these bearish indicators.

Further compounding the cautious outlook, crypto treasury inflows have recorded their lowest levels since the beginning of 2024. While Bitcoin treasury firms accounted for nearly all capital inflows in May, the overall BTC-linked capital formation has experienced a sharp drop compared to the previous month of April. This significant decrease in capital formation highlights a reduction in new investment into the sector, contributing to the current market pressures.