- BTC falls to 65K, down 11% in 7 days
- Institutions offload BTC – BTC ETFs record 12 straight days of net outflows
- Capital rotates out of BTC into US AI and chip stocks
- Upcoming mega IPOs could drain capital further
- BTC technical analysis
is extending its sell-off on Wednesday, dropping to 65,000, a two-month low. The largest cryptocurrency is trading 3.5% lower over the past 24 hours and has slumped 11% over the past seven days.
Institutions Offload, Fuelling BTC’s Move Lower
Bitcoin ETF outflows have now extended to a 12th consecutive day, marking a record streak that has seen almost $4 billion leave the sector. Persistent ETF outflows signal weakening institutional demand, removing a key source of buying support and weighing on market sentiment. If the trend continues, it could fuel a deeper correction in Bitcoin.
Institutional activity on the Chicago Mercantile Exchange has also fallen sharply. Open interest in CME Bitcoin futures dropped to 97,935 BTC at the start of the week, marking the lowest level in two and a half years. The decline suggests institutional investors are reducing exposure to Bitcoin, which may also help explain the deterioration in ETF flows.
Fear in Crypto vs Euphoria in (AI) Stocks
While the Crypto Fear & Greed Index has fallen deeper into fear territory, this caution is not being reflected in traditional financial markets. U.S. equities continue to trade around record highs, driven by strong gains in AI and semiconductor stocks.
This divergence between falling Bitcoin and rising equity markets suggests capital is rotating away from crypto and into U.S. stocks, particularly AI and chip-related names that continue to attract investor flows. As investors chase returns elsewhere, liquidity available to support Bitcoin appears to be falling, pulling BTC lower.
There are precedents for this. During the rotation into FAANG stocks and biotech names in 2015, Bitcoin fell by roughly 20%. Strong inflows into energy stocks in 2022 coincided with a 50% decline in BTC. More recently, the surge in AI-related equities has aligned with renewed weakness in Bitcoin.
According to Binance Research, previous periods of capital rotation into equities have tended to be relatively short-lived for Bitcoin, typically lasting between two and twenty weeks. However, the upcoming IPO pipeline could present an additional challenge. Potential listings from SpaceX, Anthropic and OpenAI may attract significant institutional capital, creating another source of competition for investor funds and potentially draining liquidity from the crypto market.
Conclusion
Taken together, weakening ETF demand, falling institutional participation, deteriorating sentiment and growing competition for capital help explain why Bitcoin is struggling even as traditional equity markets continue to push to record highs.
Any sense that the AI trade is weakening could spur a rotation back towards BTC, which looks undervalued compared to US equities.
Bitcoin Technical Analysis
Bitcoin has broken down from the ascending channel it has traded in since the start of February, falling to a low of 65,000, the level last seen in late March. The Hammer candlestick combined with the RSI deep in oversold territory suggests a local bottom could be in for now.
Further downside could see sellers head towards 60,000, the 2026 low.
Any recovery would need to see the price re-enter the ascending channel around 72.7k, with a rise above here opening the door to the 50 SMA at 77k, before exposing the 200 SMA and the midpoint of the channel at 79k.
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