DeFi and smart-contract tokens are experiencing significant losses as bitcoin continues to decline for the fourth consecutive day. Concerns surrounding STRC, the preferred stock with dividends from Strategy, are heavily influencing market sentiment. Major cryptocurrencies such as bitcoin and ether have seen their prices drop for four straight days, with broad indexes from Decryptnews reflecting the increasing selling pressure. Market sentiment has turned negative regarding Strategy (MSTR) and its STRC preferred stock, as investors fear that the company and financially strained bitcoin miners may be forced to sell after enduring months of bitcoin prices below production costs. Derivatives data indicates a wave of long liquidations, high open interest, bearish funding rates, and rising demand for protective bitcoin puts. The largest cryptocurrencies have remained under pressure, with bitcoin dropping 2.5% in the last 24 hours to just below $62,400. It is not alone in this downturn; the Decryptnews 20 Index (CD20) has decreased by 3.3%, with ether (ETH), XRP (XRP), and solana (SOL) all showing weakness. The Decryptnews Smart Contract Platform Select Capped Index has fallen by 4%, with the Decryptnews 80 and Decryptnews DeFi Select Index trailing closely behind. Concerns about Strategy (MSTR), the bitcoin treasury company led by Michael Saylor, continue to weigh heavily on market sentiment, particularly regarding its STRC preferred stock that pays dividends. Analysts at Marex noted, ‘Strategy, the largest publicly listed BTC holder, has seen its STRC preferred stock collapse below par, and the market is now pricing in the necessity for it to sell coins to maintain the structure.’ They added, ‘With five consecutive months of BTC trading below its estimated $78k production cost, the weakest miners are being quietly forced to capitulate, introducing two significant sellers that weren’t present a week ago.’ In terms of derivatives positioning, bulls are continuing to suffer as the market falters following Wednesday’s hawkish Fed meeting. Over the past 24 hours, more than $450 million in leveraged positions have been liquidated, predominantly affecting long positions. Open interest (OI) in bitcoin and ether futures has remained relatively stable over the past day, while SOL futures OI has risen to over 70 million tokens, just shy of the June 5 record of 71.57 million. This indicates that demand for leverage remains near all-time highs, suggesting potential for significant volatility. XRP futures OI is also at its highest level since October of last year. Regarding cumulative volume delta, most of the top 25 tokens, except TRX and LAB, show negative OI-adjusted CVD over the last 24 hours, indicating that sellers are placing market orders, driving price action rather than relying on passive limit orders. This trend has been consistent since at least Wednesday. Funding rates for the majority of tokens remain flat to negative, indicating bearish sentiment, with ADA, XLM, and BCH funding rates declining to between minus 20% and minus 30%. In the bitcoin options market, traders are increasingly purchasing put options in anticipation of a possible decline to $52,000 or lower in the upcoming weeks. Bearish sentiment is also reflected in the 25-delta skews, which show one-week puts trading at a volatility premium of 10% or more. Token Talk: Need proof of the frenzied sentiment surrounding AI? Look at the LAB token, native to the LAB Terminal, a browser-based platform for high-performance trade execution. Its key feature is AI-driven research and trade routing to minimize slippage. LAB has surged 57% in the past week, a remarkable increase compared to the broader market’s struggles. The outperformance doesn’t stop there; the token has skyrocketed by 92% this month, following gains of 900% in May, 250% in April, and 78% in March. It’s a true bull market. During the same timeframe, bitcoin has fluctuated between $68,000 and $82,000, eventually settling at $63,000. While LAB’s performance is striking, there appears to be no clear reason for it, and it has not been without controversy. Blockchain investigative expert ZachXBT recently pointed out that insiders allegedly hold 95% of the token’s supply. He noted that they have employed four concurrent methods to attract retail investors, including high-interest over-the-counter loans with promotional conditions, unilateral vesting period extensions, delayed or withheld market rewards, and undisclosed market-making agreements. As the adage goes, ‘All that glitters is not gold.’ In May, combined exchange volumes decreased by 3.45% to $4.41 trillion, marking the lowest levels since September 2024. Meanwhile, RWA perpetual futures volumes increased by 10.4% against the trend, reaching a new all-time high.