Bitcoin (BTC-USD) extended its recent losses on Wednesday, dropping more than 2% to hover around $66,000 as selling pressure continued to mount across the cryptocurrency market.
The world’s largest cryptocurrency has been in sell-off mode for several sessions, with investor sentiment taking a sharp turn lower earlier in the week.
Sentiment deteriorated on Monday after digital asset treasury company Strategy (NASDAQ: MSTR) revealed it had sold bitcoin tokens for the first time since 2022.
The sale involved just 32 tokens, a fraction of Strategy’s holdings of more than 843,000 bitcoin, but the move still rattled markets considerably.
The sale was seen as a departure from the company’s aggressive buy-and-hold strategy that had made its founder Michael Saylor a prominent industry cheerleader.
Analysts are now watching a key support level around $65,000 as the next critical threshold for the token’s price trajectory.
“If there were to be a protracted and significant break below here, then that would increase the likelihood that the February low of $60,000 comes into play,” said David Morrison, senior market analyst at Trade Nation.
Compass Point’s Ed Engel noted that 26% of bitcoin sales over the past 30 days came from investors who had purchased the token when it was priced above $90,000.
“This cohort of top-buyers had been resilient throughout the bear market; however, they’re finally capitulating as BTC approaches new cycle lows,” Engel said in a note.
Engel added that the pattern of selling behavior was shifting his firm’s outlook on where the market cycle currently stands.
“This makes us more confident that BTC’s bear market is in late stages,” he added, offering a cautiously optimistic signal for investors tracking the token’s long-term recovery prospects.
