Is Bitcoin Falling Out of Favor?

The BTN26, the July Bitcoin futures contract, has been down 11 of the last 15 sessions for a total loss of 15795 points, or -19.77%, trading down to 62000 on 06/04/2026 — its lowest level since 2/05/2026.

I was never in love with Bitcoin, but now the reasons for not owning it have grown. It has clearly fallen out of favor. After it dropped down to the 66000 level back on March 30, there was a rush to get back in. It rallied back to the 84000 level, with people thinking they had missed the boat, but since then, we have seen massive institutional outflows.

With 11 consecutive days of net outflows, nearly $3.5 billion has been pulled out of the market. Furthermore, the disruptions in the Strait of Hormuz and spiking crude oil prices have renewed fears of sticky inflation. Last but not least, MicroStrategy recently sold a tiny amount, marking its first sale since late 2022.

Summary Ladder Below 62k

It is much easier to be wrong than right, and it is always going to be that way. How much of yesterday’s afternoon buying was driven by shorts squeezing? I suspect a very large percentage.

Today, we will get a look at the May jobs report and the Week 1 June options expiration. I cannot pretend to know exactly how this will play out, but if the ES and NQ drop hard right after the jobs number comes out, my guess is we will see an initial bounce—though whether it holds is another story.

Since I did not have the exact historical statistics handy, I asked Gemini this question:

“In a midterm election year in June, what are the stats for the Week 1 options expiration? Is it historically bullish or bearish, and what does SpotGamma have to say?”

In a midterm election year, June is historically notorious for being one of the trickier, more bearish windows of the entire 4-year presidential cycle. While midterm years often end with an aggressive Q4 release-valve rally, the first half of the year—especially May and June—tends to suffer from seasonal digestion, lighter volume, and political posturing.

Here is how the stats, the historical seasonality, and the current options market dynamics line up for the Week 1 options expiration in June of a midterm year:

1. Historical Seasonality Stats: Leaning Bearish

• Historically, June options expiration, or OpEx, week in a midterm year carries a distinct downward or highly volatile bias.

• The Midterm Drag: According to historical data from Bank of America and Bloomberg, the S&P 500 averages a meager 3.2% return during the second year of the presidential cycle, compared to a 9%+ norm across all years.

• The June Particulars: Looking at historical monthly breakdowns since 1970, June averages a decline of nearly -2% in midterm years, making it one of the weakest single calendar months of the entire cycle.

• Week 1 Expiration Behavior: Entering the first week of June, markets often run into a post-Memorial Day lull where institutional positioning begins to roll or hedge ahead of the massive mid-June Triple Witching expiration. In midterm years, this week frequently acts as a transition phase where the market tests structural support rather than taking on fresh risk.

2. What SpotGamma Says: The Structural Mechanics

• When analyzing a weak seasonal window like June Week 1, SpotGamma’s options flow models highlight that the underlying dealer positioning often amplifies these bearish tendencies or keeps the market pinned.

• The Volatility “Term Structure” and Catalyst Anchors: SpotGamma tracks the implied volatility, or IV, term structure, which currently shows a steep upward slope. The near-dated volatility, like the 9-day VIX, runs significantly lower than the 30-day spot VIX.

• The Reason: Major macroeconomic structural anchors—specifically the CPI release and the crucial FOMC meeting—are stacked right behind Week 1.

• The Impact: Because the heavy-hitting macro data sits in mid-June, institutional traders use the first week of the month to buy defensive downside optionality or put on cost-efficient calendar spreads. This spikes demand for protective puts relative to bullish call buying.

• The Gamma Flip Zone & Dealer Hedging: During seasonally weak midterm stretches, the market often drifts lower toward the Gamma Flip Zone—the critical line in the sand where dealer positioning shifts from “Long Gamma” to “Short Gamma.”

• If Above the Flip Zone, Stable/Pinned: If the S&P stays in Positive Gamma, market makers are forced to buy the dips and sell the rips to remain delta-neutral. This creates a “pinning” effect, causing the market to grind sideways or stick to large gamma strikes, keeping any early June bounces very compressed.

• If Below the Flip Zone, Accelerated Volatility: If early-month liquidations or defensive put-buying push the index into Negative Gamma, dealer hedging mechanics flip completely. Market makers must sell into market weakness to hedge their underlying books. This structural dynamic is precisely what converts standard seasonal June underperformance into fast, cascading intraday flushes.

Summary Outlook

Statistically, the historical playbook says bearish to mixed for June Week 1 in a midterm year. Mechanically, SpotGamma’s view shows a market that is highly sensitive to the Gamma Flip line, with heavy long-dated hedging flow masking any surface-level stability until the mid-month Fed decisions clear the air.

Our lean: I know that is a lot to read, but the last time I asked AI about a weekly options expiration, it hit the nail on the head. As I tried to explain yesterday, the algos, HFT, and the AI bots run the world, and all the big banks are making gigantic trading profits. Yesterday, JPMorgan stock, which has been dead in the water, was up $10.00, and Goldman was up $51.00. Citibank closed up $5.25, Wells Fargo closed up $2.49, and B of A was up $1.77. They are all coining money while the public loses. Like I said above, if the ES is down sharply and falls further after the jobs report, I will be looking to buy it for a pop. I just don’t know if it will hold.

Market Profile Outlook

The ES remains in a balanced-to-bullish auction structure, with settlement at 7571.75. The key Market Profile levels are Value Area High (VAH) at 7606.00, Point of Control (POC) at 7579.00, and Value Area Low (VAL) at 7560.00. Buyers maintain control above VAL, while acceptance above VAH would signal fresh price discovery, targeting 7621.49, 7628.50, and 7632.25. The primary High-Volume Node (HVN) at 7579.00 remains the market’s main value magnet.

Bullish: Acceptance above the POC at 7579.00 keeps the auction pointed toward VAH at 7606.00. A breakout above value targets 7611.50, 7621.49, 7628.50, and 7632.25 as buyers attempt to establish new value higher.

Bearish: Failure below VAL at 7560.00 would indicate rejection of current value and shift the auction lower toward 7546.50, 7537.00, and 7524.50. Acceptance below 7524.50 targets the major composite HVN at 7491.00, followed by 7469.50, 7451.75, 7425.75, 7378.00, and ultimately the major buying tail support zone between 7354.25 and 7356.00.

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Founder's Note:

PM Note

The stock market was mixed on Thursday as Wall Street rotated capital out of semiconductor and technology stocks and into other sectors. The Dow surged nearly 900 points to a record close.

SPX traded within a 108-basis-point range and closed at 7,584 (+0.4%), above our Risk

Pivot level of 7,490. QQQ showed relative weakness on the day, closing at 741 (-0.5%), still below its Volatility Trigger level of 743. IWM demonstrated relative strength, closing at 292 (+1.5%), above its Volatility Trigger level of 288.

Meanwhile, demand across the volatility complex remained muted. VIX closed at 15.4 (-4.1%), while VVIX finished at 85.8 (-4.5%).

As highlighted in the AM Note, 0DTE put selling around the 7,500 level provided support throughout the session.

Into the close, the 99th percentile gamma level near 7,600 acted as resistance. We also observed SPX HIRO roll over from approximately +6B to +2B, reflecting a moderation in intraday options-driven directional pressure.

SPX HIRO finished the session at approximately +2B, with activity dominated by 0DTE put selling and 0DTE call selling. The prevalence of 0DTE volatility-selling flows suggests traders were tactically compressing index volatility rather than expressing longer-dated directional views.

HIRO measures cumulative customer delta from aggressive options transactions and is often used to assess intraday directional flow.

Fixed-strike implied volatilities declined by 0.2 to 1.3 volatility points across the curve, providing an additional tailwind for equities. SPX at-the-money implied volatility for tomorrow's Non-Farm Payrolls report is approximately 11.9%, implying an expected move of roughly ±70 basis points. The relatively muted implied move suggests that market participants are not pricing in a significant volatility shock from the jobs report.

Sector rotation was particularly notable, with capital flowing out of Semiconductors (SMH -1.6%) and into Financials (XLF +2.6%) and Healthcare (+3.1%).

Within Financials, Blackstone (BX) broke above the 110 Key Gamma Strike and Put Wall. BX closed at 119 (+7.5%) on the day, though it remains below the Hedge Wall at 125.

Within Healthcare, UnitedHealthcare (UNH) broke above 377.5 and briefly reached the 400 Key Gamma Strike, which also aligns with the Call Wall. UNH closed at 397 (+5.2%) on the session.

After the close, both Rubrik (RBRK) and Lululemon (LULU) reported earnings. At the time of writing, RBRK was trading approximately 2% lower versus an implied move of 14%, while LULU was down approximately 11% versus an implied move of 8%.

Tomorrow, we will continue monitoring HIRO and TAPE to evaluate how traders position in both names following their earnings releases.

ES Levels

The bull/bear line for the ES is at 7587.75. This is the key level that needs to be reclaimed for bullish momentum to improve. While ES remains below this level, sellers retain short-term control.

Currently, ES is trading around 7567.25, showing weakness below the bull/bear line. If price remains under 7587.75, downside pressure can continue toward 7539.25, which is today’s lower-range target. Below that, additional support comes in at 7524.50, followed by 7493.75.

On the upside, initial resistance sits at 7587.75. If ES can reclaim and hold above that level, the next upside levels are 7601.00 and 7611.50. A stronger push above those levels opens the door for a move toward 7636.25, which is today’s upper-range target. Above that, the next major resistance is 7682.00.

Overall, ES remains bearish below 7587.75. Bulls need a sustained reclaim of the bull/bear line to shift momentum back upward. Until then, rallies into resistance should be treated cautiously, with 7539.25 as the main downside target for today.

NQ Levels

The bull/bear line for the NQ is at 30443.75. This is the key level that must be reclaimed for bullish momentum to improve. While price remains below this level, sentiment stays bearish and rallies into 30443.75 should be treated cautiously.

Currently, NQ is trading around 30226.50, showing weakness below the bull/bear line. The immediate downside focus is 30167.00, today’s lower-range target. If sellers push through 30167.00 and price cannot recover it, downside pressure could extend toward 29906.25.

On the upside, first resistance is at 30443.75. A sustained move back above that level would shift the intraday tone more neutral-to-bullish and open the door for a test of 30498.25, then 30603.25. Above that, the upper range target is 30720.75. If buyers can clear and hold above 30720.75, the next major upside reference is 30981.25.

Overall, NQ remains bearish below 30443.75. Bulls need to reclaim that level and hold above it to regain control. Until then, the lower range target at 30167.00 remains the key downside magnet, with 29906.25 as the next major support below.

Polaris Trading Group Summary - For Thursday, June 4, 2026

Thursday’s session was a strong example of the PTG roadmap working from pre-market preparation through the RTH close. David’s levels and Cycle Day framework guided the room well, with multiple objectives fulfilled and a strong recovery that reclaimed the prior day’s lost range.

Pre-Market Tone

• David opened with the key PTG links, DTS resources, and risk disclaimer.

• The D-Level was already responding pre-RTH, showing that important levels were active before the regular session.

• Nasdaq futures were under pressure early, extending losses to a session low of about 1.5%.

• The overnight DTS downside target at 7530 was fulfilled cleanly, then price reversed.

• David emphasized the value of preparation: the target was identified in advance and respected by the market.

Early RTH Session

• David referenced the Outside-In Playbook as the session began to develop.

• The key Cycle Day reference was the Cycle Day 1 low at 7576.50, which became an important objective.

• Market breadth was supportive, with David noting 75/25 Advancers/Decliners.

• The RTH gap close was completed by late morning.

3-Day Cycle Fulfillment

• The room tracked the positive 3-Day Cycle expectation.

• David noted that the 92.79% Positive 3-Day Cycle had been fulfilled.

• Initial upside objectives were listed as:

  • 7560

  • 7575

  • 7585

• The 7585 target was fulfilled, producing one of the day’s key “BOOOOM” moments.

Afternoon Continuation

• David returned for the afternoon session and noted that the BTFD crowd was active.

• A key behavioral lesson emerged:

  • When everyone is looking to buy a pullback, the market may not offer one.

• David flagged 7610 GEX on deck in the early afternoon.

• Price later fulfilled the Cycle Day 3 range target at 7609.75.

• The 7610 GEX target was filled, confirming another major objective.

End-of-Day Read

• David confirmed that the 3-Day Cycle targets were fulfilled.

• The market effectively reclaimed the prior day’s lost range.

• The session ended with a $1 billion MOC buy imbalance.

• David looked ahead to the Friday Jobs Report as a possible catalyst for new highs into the end of the week.

Positive Trades and Key Wins

• The overnight DTS downside target at 7530 was fulfilled and followed by a reversal.

• The RTH gap close was completed.

• The 7585 upside target was reached.

• The Cycle Day 3 range target near 7609.75 was fulfilled.

• The 7610 GEX target was filled.

• The room had a clear roadmap from downside target fulfillment to upside recovery.

Lessons Learned

• Trust the prepared levels. The DTS and Cycle Day targets gave traders a reliable structure.

• Avoid “I should have taken it” thinking. Missed trades should not create emotional baggage.

• Cycle Day structure matters. The 3-Day Cycle framework provided the day’s main roadmap.

• Crowded trades can be denied. When too many traders are waiting for the same pullback, price may continue without them.

• Clean exits protect focus. David’s “one and out” crude oil comment reinforced the importance of avoiding lingering pain.

• Preparation beats reaction. The best opportunities came from planned levels, not chasing after the move.

DTG Room Preview – Friday, June 5, 2026

Macro Focus

• US index futures are leaning slightly risk-off ahead of the May Jobs Report at 8:30am ET, today’s key catalyst.

• Traders are watching for signs of labor-market cooling or re-acceleration, with the print likely to drive rate-cut expectations and intraday direction.

• Additional data includes Consumer Credit at 2:00pm ET.

Geopolitical / Oil

• US–Iran peace talks have reportedly stalled, adding pressure to global equities and supporting safe-haven demand.

• Oil is lower this morning but remains elevated after a multi-week climb tied to Middle East tensions.

• Oil volatility remains important for inflation expectations and Fed-cut pricing.

Volatility / Risk Sentiment

• The VIX is near 15.70, up about 2%, showing increased hedging demand into the jobs report.

• Gold is slightly lower, while Bitcoin is down nearly 2%, reflecting continued deleveraging in crypto.

• Crypto weakness remains a secondary drag on speculative risk appetite and NQ sentiment.

Tech / AI / Semis

• AI and semiconductor names remain highly sensitive today.

• Foxconn raised Q2 guidance on stronger AI hardware demand, supporting the longer-term AI infrastructure theme.

• Broadcom sold off sharply after its AI chip guidance failed to impress despite strong earnings.

• Reports that US officials may consider government stakes in AI companies add policy uncertainty across mega-cap AI and chip names.

ES Levels / Trade Setup

• Whale bias is leaning bearish into the jobs report on light overnight large-trader volume.

• Key resistance: 7625/30, then 7685/90 and 7985/90.

• Key support: 7535/40, then 7483/88 and 7445/50.

• The broader trend remains constructive with the 50-day MA at 7190.50 and 200-day MA at 6953.50 both rising, but today’s tape is likely to stay catalyst-driven around the jobs data.