Bitcoin fell to its lowest point since February on Wednesday, as capital continues to flow into various other assets, prompting investors to withdraw from the cryptocurrency market.

The world's largest cryptocurrency by market value dipped to a low of $65,385, marking a daily decline of 2.3%. This drop follows record-high closing levels for the U.S. S&P 500 and Nasdaq 100 indices on Tuesday, alongside broad strength in Asia-Pacific equities, with Japan's Nikkei 225 also hitting a new record on Wednesday.

QCP's trading desk indicated that the core driver is a rotation in market liquidity. "Persistent strength in equity markets is continuously diverting existing capital, placing the crypto industry in a competition for funds. Investors previously positioned in crypto assets, along with traditional asset managers, are being drawn to the more favorable momentum in stock markets," the firm stated.

QCP added that investors are selling Bitcoin to raise capital, redirecting funds towards private markets or participating in high-profile initial public offerings (IPOs) for companies like SpaceX, OpenAI, and Anthropic, which are among the most anticipated listings of the year.

From a price perspective, market analysts are closely watching the support zone around $65,000. A breach of this level could potentially lead to a more significant decline for Bitcoin.

BTIG technical strategist Jonathan Krinsky noted, "Bitcoin must hold the $65,000 level. It is the final key support before a potential test of the year's low around $60,000."

QCP holds a similar view, stating: "Initial support lies in the range of approximately $63,500, plus or minus $500. This area saw buying interest multiple times during February and March. A break below this zone would target $62,000, followed by the key psychological level and cycle low of $60,000. Below that, the next significant support is situated around $58,000."