Long-term holders dumped US$2.4 billion in two days
Bitcoin's most committed holders are finally selling and analysts say that might actually be a good sign.
Long-term bitcoin holders, defined as those who have held their coins for at least 155 days, sold about US$2.4bn in just two days, according to a Compass Point note by analyst Ed Engel cited by CNBC.
Engel said the move "has large implications on BTC's supply/demand balances."
Engel also noted that 26 percent of bitcoin sold in the past 30 days came from investors who bought above US$90,000.
He said the selloff pattern was typical of late-cycle bear markets, making him "more confident that BTC's bear market is in late stages."
Bitcoin fell 4 percent on Wednesday to US$64,721.39, its lowest since February 28, according to Reuters, putting the coin down nearly 10 percent week-to-date and more than 45 percent below its October record of over US$120,000.
Bitcoin ETFs extended their longest-ever outflow streak to 12 consecutive days on Tuesday, according to SoSoValue as cited by CNBC, with net assets falling to US$85 bn from US$107.8 bn on May 14.
Citi analyst Alex Saunders said ETF flows explain "approximately 45 percent of weekly return variation" in bitcoin's price, in a note.
He added that recent negative flows, combined with diminishing prospects for a US market structure bill, pointed to continued weak sentiment.
"We expect sentiment to remain lackluster, especially as the divergence with equity performance remains stark, absent positive news on the regulatory front," Saunders said.
The trading desk at QCP told CNBC that "the broader issue is liquidity rotation," with crypto facing competition for capital as equity markets hit records.
QCP added that investors may be redirecting liquidity from bitcoin toward anticipated IPOs including SpaceX, OpenAI and Anthropic.
Michael Rabkin, global head of business development at DV Chain, told BNN Bloomberg that Strategy's sale of 32 bitcoin, its first since 2022, rattled investors.
The disclosure, he said, "broke really a long-standing never-sell policy and kind of spooked the market."
Still, analysts broadly told CNBC that the sale was not a significant price driver.
Bitcoin's dual narratives are under pressure as well.
The coin has failed to recover toward its October record despite the US-Iran war, undermining its "digital gold" thesis, while its correlation to high-beta tech stocks has also weakened as equities surged to new highs.
On support levels, BTIG technical strategist Jonathan Krinsky told CNBC that US$65,000 is "really the last bastion of support before a test of year-to-date lows around $60,000."
QCP said a break below US$63,000 to US$64,000 would bring US$62,000 into focus, followed by US$60,000 and then US$58,000 as the next major support.
Prediction market traders on Kalshi give just a 27 percent chance bitcoin hits six figures in 2026, down from nearly 50 percent odds in early May.
Polymarket traders put the odds of a new all-time high in 2026 at 12 percent, while an 80 percent probability is assigned to bitcoin falling below US$60,000 this year.
Rabkin told BNN Bloomberg the longer-term thesis remains intact, citing growing regulatory clarity as potentially "the most important development of the year."
On institutions, he said the conversation has shifted "from whether institutions should own Bitcoin to how much Bitcoin they should own."
