On June 26, 2026, the crypto market underwent a dramatic leverage wipeout. Bitcoin fell below the critical psychological threshold of $60,000, hitting a low of $58,000. According to Gate market data, as of June 26, 2026, BTC was quoted at approximately $59,800 USD.
What set this downturn apart was its unique driving mechanism—not just a simple macro headwind or technical correction, but a complete transmission chain running from corporate preferred shares to the spot Bitcoin market. The central anchor was a perpetual preferred share called STRC, issued by a company named Strategy (formerly MicroStrategy).
Data shows that in the past 24 hours, total liquidations across the market reached $1.501 billion, with long positions accounting for $1.213 billion and short positions $288 million. Bitcoin alone saw $686 million in liquidations, while Ethereum saw $360 million. Over 200,000 investors were forcibly liquidated. The Fear & Greed Index slid further from 17 to 12, entering the "Extreme Fear" zone.
How Did the STRC Selloff Cascade into Spot BTC Market Selling?
STRC is a variable-rate Series A perpetual convertible preferred share launched by Strategy in July 2025, with a face value of $100 and an annualized dividend yield of 11.5%. Its core design logic: When STRC trades above face value, the company uses an ATM (at-the-market) mechanism to issue additional preferred shares and raise funds to buy Bitcoin. This model worked smoothly during Bitcoin’s bull cycle, creating a positive financing flywheel: "issue preferred shares → buy BTC → asset appreciation → share price increase."
However, when Bitcoin enters a downtrend, this flywheel starts spinning in reverse.
The 90-day correlation coefficient between STRC and Bitcoin has climbed to nearly 0.70, the highest since STRC’s listing in July 2025. This indicates STRC is losing its "quasi-fixed income" stability, with volatility now matching or even exceeding that of its underlying asset.
The transmission chain works as follows: Bitcoin price declines → Strategy’s BTC holdings face mounting unrealized losses → market questions STRC’s dividend payment capacity → STRC falls below face value → company halts ATM issuance, losing access to low-cost funding → to pay dividends, the company may be forced to sell Bitcoin → market anticipates increased supply → further pressure on Bitcoin.
Every link in this chain was confirmed on June 26.
How Severe Is the Financial Pressure on STRC and MSTR?
Strategy currently holds 847,363 BTC, with a total acquisition cost of about $64.1 billion and an average purchase price of roughly $75,651 USD. At the current price of around $59,800 USD, the market value of these holdings is about $53 billion, representing an unrealized loss of over $11 billion. Notably, all Bitcoin acquired in 2024, 2025, and 2026—purchased at prices above current levels—are now underwater.
The price action of STRC reflects the concentrated release of this pressure. As of June 26, 2026, STRC had dropped to $76, down 24% from its $100 face value, with an intraday low of $73.65. MSTR common stock fell below $90, touching $86.72, its lowest since February 2024.
The company’s annual dividend obligation has surged from about $300 million at the start of 2026 to roughly $1.2 billion—a fourfold increase—while cash reserves have dropped 38% over the same period. Dividend coverage has plunged from over seven years to just about 14 months. Cash reserves now stand at only $1.4 billion.
These numbers paint a clear picture: Strategy’s financial leverage is tightening at an unprecedented pace.
How Does the Negative Feedback Loop Amplify Market Volatility?
Once STRC fell below face value, the company was forced to suspend its ATM issuance plan. This means Strategy lost its core channel for raising funds via preferred share issuance to buy Bitcoin. Yet, the company still needs to pay about $1.2 billion in annual preferred dividends.
Driven by market panic, investors began to expect that the company might have to sell its Bitcoin holdings to raise cash for dividends. This expectation alone puts pressure on spot Bitcoin prices—even if the company hasn’t actually sold any BTC.
What’s more, the drop in MSTR’s share price further constricts the company’s financing options. MSTR stock has fallen about 40% so far in 2026. As the share price drops, raising cash via new equity issuance becomes more expensive. Ultimately, all funding pressure shifts to the reserve asset—Bitcoin.
This is the core of the negative feedback loop: price declines → financial pressure increases → market expects forced selling → further price declines. Each cycle intensifies the next.
What Does the $1.5 Billion in Liquidations Reveal About Market Structure?
Of the $1.501 billion in total liquidations, $1.213 billion were long positions and just $288 million were shorts. The long-to-short liquidation ratio of about 4.2:1 shows that the market had built up significant leveraged long positions.
Bitcoin alone accounted for $686 million in liquidations, Ethereum for $360 million. The largest single liquidation was a BTC-USD contract on Hyperliquid, valued at about $38.05 million. Over 200,000 investors were forcibly liquidated.
These figures point to a clear conclusion: the market had accumulated substantial leveraged long positions during previous volatility, and the STRC crisis-triggered selloff set off a wave of forced liquidations. Forced liquidation of leveraged positions → spot market selling → price declines → more liquidations—a textbook negative feedback loop.
Total market capitalization fell 1.6% in 24 hours, while total trading volume rose 1.8% over the same period. This price-down, volume-up pattern suggests that selling pressure has yet to be fully released. BTC’s market cap dominance rose to 55.8%, indicating a continued trend of capital concentrating in Bitcoin.
What Does a Fear & Greed Index Reading of 12 Signify?
The Fear & Greed Index dropped from 17 to 12, plunging deep into the "Extreme Fear" zone. This reading is approaching the lowest levels ever recorded since the index’s inception.
Historically, readings below 12 are rare. During "Black Thursday" in March 2020, the index hit 8; after the Terra-Luna crash in May 2022, it fell to 6; and after the FTX collapse in November 2022, it bottomed around 12. In February 2026, the index even reached an all-time low of 5.
From this perspective, the current reading of 12 is within the lowest 10% range since the index was created. However, extreme readings do not automatically signal a market bottom—historically, periods of extreme fear can last for weeks or even months.
The stablecoin market cap share remains high (USDT + USDC over 12%), indicating ample liquidity but extremely low risk appetite. Large amounts of capital are sitting in "cash" on the sidelines, waiting for a clear entry signal.
How Does This Crisis Compare to Past Crypto Market Collapses?
Market narratives are highly focused on the STRC leverage crisis, with several KOLs comparing this crash to the Luna event. Structurally, however, the two are fundamentally different.
Luna’s collapse stemmed from a design flaw in algorithmic stablecoins—a depeg triggered a death spiral, wiping out the entire ecosystem. In contrast, the STRC crisis is essentially a stress test of corporate leverage during a Bitcoin downcycle. STRC is a Nasdaq-listed perpetual preferred share, and its price reflects the market’s assessment of Strategy’s ability to keep paying dividends.
Arkham has clearly pointed out that Strategy is under no legal obligation to pay STRC dividends; even if the company faces financial difficulties, it won’t face Luna-style "forced liquidation" risk. This is fundamentally different from Luna’s automatic liquidation mechanism.
However, this does not mean the risk can be ignored. To keep STRC outstanding, Strategy must pay $1.2 billion in dividends annually. If MSTR investors realize their capital is being used to pay preferred shareholders, they may reduce their MSTR purchases in the future. Over time, this could erode the company’s capital structure.
Summary
The STRC leverage crisis highlights the increasingly tight coupling between corporate leverage and crypto asset prices. The discount on a single company’s preferred shares, transmitted through the STRC→MSTR→BTC chain, ultimately triggered $1.501 billion in long liquidations across the market.
The core mechanism is straightforward: Bitcoin price declines expand Strategy’s unrealized losses (over $11 billion) → STRC drops 24% below face value → company suspends ATM issuance, limiting financing → market expects possible forced Bitcoin sales → selling pressure further depresses BTC price → more leveraged long positions are liquidated.
The Fear & Greed Index has dropped to 12, signaling extreme market fear. But extreme fear itself is not a bottom signal—it’s simply a snapshot of current market sentiment.
Key factors to watch going forward include: a possible STRC dividend rate adjustment announcement on June 30; Bitcoin’s trading volume and price action in the $58,000–$60,000 range; and whether the Fear & Greed Index rebounds. These variables will determine whether this leverage wipeout is nearing its end or just getting started.
Frequently Asked Questions
Q: What is STRC? How does it differ from regular cryptocurrencies?
STRC is a perpetual preferred share issued by Strategy (formerly MicroStrategy) and listed on Nasdaq. It has a face value of $100 and an annualized dividend yield of 11.5%. It is not an on-chain native token, but a corporate preferred share traded on a traditional stock exchange. Its price is highly correlated with Bitcoin, with a correlation coefficient of 0.70.
Q: Why does a drop in STRC lead to a drop in Bitcoin’s price?
The transmission chain is as follows: STRC drops → Strategy suspends ATM issuance (loses funding channel) → market expects the company may sell Bitcoin to pay dividends → selling pressure weighs on BTC spot price → triggers liquidations of leveraged long positions → further price declines.
Q: How is the $1.5 billion in liquidations distributed?
Long liquidations totaled $1.213 billion, short liquidations $288 million. Bitcoin accounted for $686 million, Ethereum for $360 million. The largest single liquidation was about $38.05 million.
Q: What does a Fear & Greed Index of 12 mean?
A reading of 12 is deep in the "Extreme Fear" zone, within the lowest 10% since the index was created. Historically, the index hit 8 in March 2020, 6 in May 2022, and 12 in November 2022.
Q: Will Strategy be forced to liquidate its Bitcoin holdings?
There is currently no forced liquidation mechanism. Strategy is under no legal obligation to pay STRC dividends, and even if it doesn’t pay, it won’t face Luna-style forced liquidation. However, maintaining STRC requires about $1.2 billion in annual dividends, which could create ongoing financial pressure for the company.
