Bitcoin Warning: $66,000 Tested as Analyst Warns of Multi-Month Oversold Phase

Bitcoin fell to its lowest level in over three weeks as traders turned defensive following the year’s largest options expiry, while investors continued withdrawing from crypto exchange-traded funds.

Bitcoin fell to a low of $65,498 on Friday, the lowest since March 2. Roughly $14 billion of Bitcoin options expired Friday, as measured by the number of outstanding contracts, known as open interest.

At the time of writing, $BTC was down 2.28% in the last 24 hours to $66,322 and down 6.11% weekly. As Bitcoin trades 47.42% down from its all-time high of over $126,000 reached in October 2025, a few indicators in the market are hinting at oversold signals, with some analysts believing that this might lead to a sustained Bitcoin rise shortly.

Amid the drop, Bitcoin whale wallets are accumulating, which is seen as a promising sign of an imminent breakout. According to Santiment, whales and sharks with 10-10,000 $BTC have accumulated 61,568 $BTC (about 0.45% increase) in the past month.

Wallets with under 0.01 $BTC have also collectively added 0.42% more to their wallets in the past month, essentially matching the rate of accumulation seen from whales and sharks.

March has seen about $1.4 billion of net inflows into Bitcoin ETFs following four straight months of net outflows. However, investors withdrew $171 million from spot ETFs on Thursday.

Bitcoin oversold but not out?

Despite this slight optimism, crypto analyst Willy Woo issues a warning: "$BTC can stay oversold for more months that one can stay solvent."

Woo said this in response to a Bitcoin trader who noted that the Bitcoin monthly RSI has reached extreme oversold levels, which triggered massive recoveries in the past.

The market seems to be moving into a consolidation phase, as seen in softer activity and defensive positioning among traders.

Woo's warning seems to suggest a stabilization phase in the market following a continued sell-off.

The highest open interest is now concentrated in $60,000 puts, according to Deribit data. The put/call ratio in the last 24 hours stands at 1.3, indicating increased demand for downside protection heading into the weekend.