Bitcoin (BTC) extended its recent slide on Wednesday, falling more than 2% to trade around $65,267 and bringing the cryptocurrency closer to a level many analysts view as a critical test for the market.
The latest leg lower follows a sharp deterioration in sentiment that began earlier this week after Strategy, the company formerly known as MicroStrategy, disclosed it had sold 32 bitcoin.
While the amount represented only a tiny fraction of the firm’s holding of more than 843,000 coins, the move attracted attention because it marked the first sale from Strategy since 2022 and contrasted with the company’s long-standing accumulation strategy.
Bitcoin has now fallen more than 45% from its peak above $120,000 reached last October, while losses since the start of the week have approached 10%. Tuesday’s decline pushed prices to their lowest level since early April as selling pressure intensified across the digital asset market.
Market participants are increasingly focused on the $65,000 area. David Morrison, senior market analyst at Trade Nation, said a sustained break below that level could open the door to a test of February’s low near $60,000.
Signs of capitulation are also beginning to emerge among investors who bought near the top of the market. According to Compass Point analyst Ed Engel, around 26% of bitcoin sold during the past month came from holders who purchased the cryptocurrency above $90,000.
That group had largely remained on the sidelines throughout the downturn, but Engel said investors who entered near the highs are now beginning to exit positions as bitcoin approaches fresh cycle lows. He believes that development may indicate the current bear market is entering its later stages.
Prediction markets are painting an increasingly cautious picture. Traders on Kalshi currently assign almost an 80% probability that bitcoin falls below $60,000 during 2026, which would take the cryptocurrency beneath February’s low of $60,062. They also see a 52% chance of prices dropping below $50,000 this year, a level bitcoin has not traded beneath since August 2024.
Expectations for a recovery have weakened at the same time. Kalshi traders now place only a 27% probability on bitcoin reclaiming six-figure territory during 2026, down sharply from nearly 50% in early May. On Polymarket, traders assign just a 12% chance that bitcoin reaches a new all-time high next year.
Despite continued institutional adoption, regulatory progress and broader access through exchange-traded funds, some analysts argue the current weakness reflects a shift in investor attention rather than a collapse in demand.
Jim Ferraioli, director of digital currencies research and strategy at Charles Schwab, said bitcoin’s struggles stem from losing its position as the market’s preferred momentum trade.
Capital that previously flowed into cryptocurrencies is increasingly being directed towards gold, artificial intelligence-linked shares and new stock market listings, while seasonal weakness and investors seeking to exit positions at breakeven have further reduced buying interest.
For now, attention remains fixed on whether bitcoin can defend the $65,000 level or whether another wave of selling will send the market searching for support closer to $60,000.
