Any additional downside for Bitcoin from current levels around $60,000 could further weigh on investor sentiment, said Matt Maley, a strategist at Miller Tabak. While Wall Street firms continue to invest in the digital asset space, retail investors — who were a major force behind previous crypto rallies — have moved their focus to high-growth AI and technology stocks, Maley said. Recent notable outflows in bitcoin ETFs are also suggesting that investor enthusiasm has weakened, he added. “The cryptocurrency has also shown signs of decoupling from the equity market…raising concerns that it may not benefit from broader stock market strength,” Maley said, adding that advances in quantum computing also highlight future security risks for cryptocurrencies. Maley’s concerns were backed up by John Roque, a technical strategist at 22V Research. Bitcoin is retesting its first downside target of $60,000 “by a hair’s breadth,” Roque said in a note Friday. A break of that level, “which I’ve been expecting,” would imply a drop to $40,000, he added. However, Maley still sees some bright spots for crypto on the regulatory front amid expectations that the Congress will pass a crypto structure bill which will have “clearer rules” for platforms involved in digital assets. “Such legislation could reduce uncertainty and encourage broader institutional participation over time,” he said. Bitcoin ETFs recently saw their biggest monthly outflows since 2024 , as institutional investors scramble to reduce their risk exposure amid broader market uncertainty and concerns over higher rates. The largest cryptocurrency peaked around $126,000 about eight months ago. -CNBC’s Tanaya Macheel contributed to the story.