- Bitcoin drops by 22% in a month as AI stocks and IPO speculation attract investor capital.
- Analysts say fading market momentum matters more than Strategy’s recent BTC sale.
- Long-term holders stay firm while exchange balances fall and selling pressure eases.
Bitcoin has struggled to regain upward momentum despite a number of changes that many market participants previously viewed as supportive for the digital asset sector.
While the cryptocurrency industry has benefited from growing institutional participation, spot exchange-traded funds, and ongoing regulatory discussions in the United States, Bitcoin has declined more than 22% over the past month as U.S. equities advanced to new highs.
Bitcoin Loses Ground as Momentum Traders Look Elsewhere
Jim Ferraioli, Director of Digital Currencies Research and Strategy at Charles Schwab, said Bitcoin’s recent performance shows the loss of its position as the market’s dominant momentum trade. He noted that Bitcoin has remained in a bear market since October, following a decline after reaching a record high.
According to Ferraioli, investor capital has moved toward sectors attracting stronger market interest. Artificial intelligence-related companies have emerged as a major destination for speculative capital, with firms involved in data centers, computing infrastructure, and AI development drawing investor attention. Anticipated public offerings from companies such as OpenAI and Anthropic have also become key areas of focus for growth-oriented investors.
He added that the trend extends into crypto markets, where traders are seeking exposure to assets beyond traditional cryptocurrencies. Platforms such as Hyperliquid have introduced synthetic contracts linked to private companies and other non-crypto assets, providing additional alternatives for speculative trading.
Analysts Downplay Impact of Strategy Bitcoin Sale
Ferraioli also dismissed suggestions that Strategy’s recent sale of 32 Bitcoin was a primary factor behind the broader market decline. While the transaction attracted attention because of Michael Saylor’s long-standing association with Bitcoin accumulation, he said the sale itself was not driving the current downturn.
Instead, he pointed to broader market conditions and investor behavior. Some investors who experienced high volatility over the past year may be using recent price recoveries to reduce exposure. Ferraioli cited a $1.26 billion off-exchange block sale of BlackRock’s IBIT Bitcoin ETF on May 26, which research firm NYDIG characterized as a large investor seeking to exit Bitcoin exposure.
Long-Term Holders Show Continued Conviction
Despite the weak price performance, some market observers see signs that selling pressure may be easing. Professional Capital Management CEO Anthony Pompliano referenced Binance Research data showing that nearly 60% of Bitcoin has remained unmoved for at least one year, up from 27% in 2012.
Pompliano also highlighted declining Bitcoin balances on exchanges, which have fallen from 17.6% during the COVID period to roughly 15%. He noted that long-term holders continue to control a growing share of supply, while newer investors are moving closer to breakeven levels.
Related: Peter Schiff Calls Bitcoin a Bubble After Trump Crypto Push Amid Strategy Sale Debate
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