Matt Maley, a strategist at Miller Tabak, said further declines in bitcoin from its current levels of around $60,000 could further weigh on investor sentiment. While Wall Street firms continue to invest in the digital asset space, retail investors, who have been the main force behind the crypto rally in the past, are shifting their focus to high-growth AI and technology stocks, Maley said. The recent notable outflows of Bitcoin ETFs also suggest that investor enthusiasm is waning, he added. “Cryptocurrencies are also showing signs of being decoupled from the stock market, raising concerns that they will not benefit from the broader stock market strength,” Maley said, adding that advances in quantum computing also highlight future security risks for cryptocurrencies. Maley’s concerns were seconded by John Locke, technical strategist at 22V Research. Locke said in a note on Friday that Bitcoin is “just in the nick of time” retesting its initial downside target of $60,000. He added that a break above the level “that I expected” would mean a fall to $40,000. However, Maley still sees bright spots for cryptocurrencies on the regulatory front, with Congress expected to pass a Cryptocurrency Structure Bill that would provide “clearer rules” for platforms involved in digital assets. “These bills could reduce uncertainty and encourage broader institutional participation in the long run,” he said. Bitcoin ETFs recently posted their biggest monthly outflows since 2024 as institutional investors scramble to reduce risk exposure amid widespread market uncertainty and concerns about rising interest rates. The largest cryptocurrency reached a peak of around $126,000 about eight months ago. -CNBC’s Tanaya Machel contributed to this article.
