Bitcoin dropped to about $65,000 on Tuesday, its lowest level since February, as a broad rotation out of crypto into competing trades like AI stocks, gold and IPOs accelerated. The 12% weekly decline comes as spot Bitcoin ETF flows, which Citi analyst Alex Saunders estimates drive roughly 45% of weekly price variation, have turned negative for the first time in months.
The Rotation Is Real
Charles Schwab director of digital currencies research Jim Ferraioli said bluntly that Bitcoin has been in a bear market since October. “There’s a lack of reason to buy when other assets are available,” he said, pointing to the money flowing into SpaceX, OpenAI and other high-profile IPOs. Gold hit fresh highs this week, and AI stocks continue to draw capital — leaving crypto on the outside.
Saunders’ data shows the connection between ETF inflows and price action is tighter than most traders assume. With net flows now negative, the pressure on Bitcoin is mechanical, not just psychological.
Strategy Sells BTC for the First Time in Four Years
In a move that caught some market watchers off guard, Strategy (MSTR) sold 32 Bitcoin for roughly $2.5 million in late May. The company called it a tax-optimization plan — its first BTC sale in four years. The amount is tiny relative to its massive holdings, but the symbolic weight of a longtime hodler trimming even a little adds to the mood.
Iran Sanctions Freeze Over $1 Billion in Crypto
U.S. Treasury Secretary Scott Bessent announced the freezing of more than $1 billion in Iranian crypto assets, and the Treasury sanctioned Iranian exchange Nobitex for alleged ties to the Islamic Revolutionary Guard Corps. While Iran-linked trades are a small slice of global volume, the move signals that the Biden administration — still in office in mid-2026 — is keeping up the pressure on crypto intermediaries used by sanctioned entities. The announcement hit just as Bitcoin was testing support, adding a political headwind to the market's existing macro drag.
Key Support Levels Under Fire
The $65,000 price is the third test of the February 6 panic low. The prior two tests — on February 24 and March 29 — each sparked a sharp recovery above $70,000. This time feels different: the Clarity Act, a U.S. crypto market structure bill that could have drawn institutional buyers, appears stalled. Seasonal weakness in summer months historically offers little support, and no major catalyst is on the near-term calendar.
Initial support lies in the $63,000–$64,000 range, with a psychological floor at $60,000 and then $58,000. Traders are watching whether the February low holds for a third time or gives way as ETF outflows and competing asset manias keep up their pull.
