Bitcoin posts worst month since June 2022 as one strategist says token could drop to $40,000

Bitcoin (BTC-USD) slid below $60,000 on Tuesday, marking its worst monthly performance since June 2022.

The world's largest cryptocurrency has had a dismal first half of the year, shedding 33% year to date compared with the broader S&P 500's (^GSPC) gain of more than 9%. It was set to end June down more than 20%.

Bitcoin has been in a sustained downward trend after tumbling from its all-time high in early October, with selling pressure and forced liquidations echoing patterns seen in prior cycle drawdowns.

While bitcoin is down roughly 52% from its record peak, analysts have noted the downturn has unfolded without the major bankruptcies that defined previous crypto bear markets.

Even digital asset treasury giant Strategy (MSTR) helped ease market concerns on Monday after announcing it had raised more than $1 billion to boost its cash reserves rather than buy more bitcoin, a reassuring sign for investors about the company's liquidity and ability to pay dividends.

"Crypto cycles historically end with a spectacular blow up and MSTR was becoming bears' leading candidate," Compass Point analyst Ed Engel wrote Monday.

"This cycle hasn't had any major insolvencies related to leverage or fraud," he added.

Read more: Is bitcoin's price volatility an investing opportunity? Here's how to buy bitcoin.

Instead, Engel said most of the deleveraging has remained contained within decentralized markets rather than spilling over into the broader crypto industry.

The downturn has been exacerbated by concerns about the possibility of a Federal Reserve rate hike and by dwindling liquidity if the central bank tightens monetary policy.

US-listed spot bitcoin ETFs are set for their largest monthly outflows since their January 2024 launch, with investors withdrawing more than $4.1 billion across the 13 funds in June, according to Bloomberg data.

David Grider of Finality Capital Partners believes bitcoin hasn't seen a bottom yet.

"I don't think we bottom until September or October for bitcoin and most digital assets around it as well," Grider told Yahoo Finance on Tuesday.

"I don't think $40,000 or $45,000 would be unreasonable," he added.

Ines Ferre is a Senior Business Reporter for Yahoo Finance covering the US stock market, publicly traded companies, and commodities. She has reported live from the floor of the New York Stock Exchange and Nasdaq.