Bitcoin (BTC-USD) rebounded to $70,000 on Friday after prices fell as low as $61,000 following a 13% plunge on Thursday, the steepest one-day drop for the cryptocurrency since the FTX collapse in November 2022.
The recovery reversed a wave of intense selling that surged through Thursday night, briefly pushing bitcoin’s decline to over 50% since its peak of $126,000 last October.
“From a sentiment perspective, comparisons across cycles are always imperfect, but anecdotally there is an outsized sense of fear and fatigue among crypto-native participants,” Sean Farrell, head of digital assets at Fundstrat, wrote in a note on Thursday night.
The strategist said he was increasing net long exposure to 80% in his portfolio, but “leaving some wiggle room for another visit into the [$50,000s].”
Other strategists have also warned that bitcoin could still drop further.
10X Research recently highlighted a significant overhang for the crypto market: overexposed bitcoin ETF holders who are underwater, with an estimated average acquisition price of around $90,000. A similar dynamic was also playing out with ethereum (ETH) ETFs.
“Under these conditions, attracting incremental allocations from Wall Street investors becomes increasingly difficult, particularly when many existing holders likely regret not reducing exposure at significantly higher levels,” 10X said in its note on Thursday.
