Bitcoin’s sagging price has crypto bears taking a victory lap. Why it’s too soon to count it out.

While U.S. stocks have kept notching record highs, bitcoin is sliding to its weakest level in months, leaving some investors wondering what they had gotten themselves into.

Bitcoin BTCUSD slumped as low as $61,348 on Thursday, its lowest level since February. U.S. spot bitcoin ETFs have posted 12 straight days of outflows, the longest streak since the products began trading in January 2024, according to Dow Jones Market Data. Investors have pulled $3.97 billion from the funds over that stretch, the second-largest 12-day outflow on record.

The selloff is raising uncomfortable questions for investors, beyond how quickly it might take for crypto prices to recover. It is testing many long-held theories about bitcoin’s place in the broader universe of tradeable assets. Some are wondering why bitcoin is struggling while semiconductor stocks and other AI-linked names have been swept up in a powerful momentum-driven rally. And as price pressures have started to accelerate once again, bitcoin is proving that it isn’t much of an inflation hedge, despite its reputation.

That has left the pioneering cryptocurrency in an awkward position. The speculative trade that powered bitcoin higher has clearly cooled, but the current despair may also be part of the late-stage bear-market process that has preceded past recoveries, analysts said.

“For those investors that were buying this as a lottery ticket or a way to get your outsized investment returns, it’s going to be a while before we get there,” said Mark Hackett, chief market strategist for Nationwide’s Investment Management Group.

On social-media platforms like X, some investors have loudly proclaimed that after years of serving as the dominant cryptocurrency, bitcoin might finally be lurching toward irrelevance.

Investors have seen this pattern before. Every time a major bitcoin bear market arrives, there is an inevitable rush of grave dancing by crypto bulls and skeptics alike.

But investors should avoid jumping to conclusions, and not only because those who have prognosticated bitcoin’s demise have been wrong in the past.

Why bitcoin has tumbled

The investment case for holding bitcoin with the hope of broader sovereign adoption, or as an insurance policy against some extreme outcome, remains intact, Hackett said.

Still, “the disappointing thing here is bitcoin hasn’t acted the way that it was put out,” he noted. “If you’ve seen inflation do what it’s done, and oil prices CL00 BRN00 and geopolitical uncertainty and government spending, this is the time that bitcoin is supposed to be shining.”

Meanwhile, the retail investors who once chased bitcoin higher have shifted their attention to other areas of the market, including artificial intelligence and potential initial public offerings from AI-related companies, according to Ryan Rasmussen, head of research at crypto asset manager Bitwise Asset Management.

“It’s no secret that AI dominates every headline right now, as AI-related stocks are showing really strong performance and absorbing all that attention and capital from the crypto market,” Rasmussen said.

That rotation has helped deepen the pressure on bitcoin, according to Jim Ferraioli, head of crypto research and strategy at Charles Schwab. Crypto investors tend to chase momentum, he noted: When crypto is working, they add exposure; when it is not, they look elsewhere.

“I think people are selling what’s out of favor right now to position for or add to what is working,” Ferraioli said.

Adding to the pressure is Strategy’s MSTR rare recent sale of bitcoin. The company said Monday that it sold 32 bitcoins between May 26 and May 31 for about $2.5 million. While the sale was tiny compared with Strategy’s remaining holdings of 843,706 bitcoins, it landed hard symbolically. Strategy has been one of the market’s most visible bitcoin buyers, while Michael Saylor, the company’s executive chair, has long been an advocate of holding bitcoin through almost any market condition.

However, analysts said the company does not appear to be in imminent danger of liquidating its bitcoin holdings. The sale has been seen more as a signal of shifting sentiment than as evidence of financial distress at Strategy.

What’s next?

Bitcoin may be nearing an important support level in the low $60,000s, according to Schwab’s Ferraioli.

For one, the most efficient miners can still produce bitcoin at costs in the low $60,000s, creating a potential fundamental floor. Meanwhile, bitcoin’s 200-week moving average, a technical level closely watched in growth assets, is also around $61,000.

Those metrics have historically been associated with bottoms in past crypto bear markets, Ferraioli said. However, he cautioned that bitcoin’s price and mining costs can influence each other if prices fall far enough to force miners to temporarily shut down operations.

In any case, Ferraioli does not expect bitcoin to quickly return to records.

Instead, 2026 is more likely to be a recovery year, he said, with investors needing time and a sustained improvement in momentum before they return in force. Summer has historically been a weaker period for bitcoin, while October, November and December have tended to be stronger months, creating the possibility of a better setup later in the year, he noted.

Regulation could also help if the timing lines up. Ferraioli pointed to the Clarity Act, a digital-asset market-structure bill being worked on in the U.S. Senate, as a possible catalyst if it advances. Its passage could help restore investor confidence in the second half of the year, particularly if it arrives as bitcoin’s seasonal backdrop becomes more favorable.