Bitcoin Falls 11% in Q2 as Rate Fears and AI Capital Rotation Erase Crypto Gains, Talos Reports

According to Talos' quarterly report released July 1, Bitcoin fell approximately 11% during Q2 2026, ending near $60,000 — roughly 52% below its late-2025 all-time high of $126,000. Ethereum dropped 20%, SOL declined 13%, and spot Bitcoin ETF inflows reversed to a net quarterly outflow of $4.08 billion, with June alone accounting for $3.84 billion of that figure. A spike in oil prices to $126.41 per barrel, a hawkish Fed recalibration, and powerful capital rotation into AI equities—where the Nasdaq 100 surged nearly 28%—drove the reversal.

The derivatives market saw acute stress, with combined BTC and ETH long liquidations totaling $8.35 billion concentrated between May 25 and June 7. Spot trading volume fell 28% quarter-over-quarter to $2.32 trillion, while Bitcoin open interest dropped 32% and Ethereum's fell 40%, leaving markets thinner heading into Q3.