Strategy, a software company turned Bitcoin treasury vehicle led by Michael Saylor, sold 32 Bitcoins for approximately $2.5 million between May 26 and 31. This is only the second Bitcoin sale in the company's history.

This move comes after Strategy signaled a shift away from Saylor's long-standing "never sell" stance, announcing that it will actively manage its balance sheet, including selling Bitcoin where it improves earnings per share or strengthens its financial position.

Citi noted that the move was not unexpected. Even after the publication of Strategy's first-quarter results, the bank's equity analysts warned that the company was moving toward more aggressive portfolio optimization, including selling tax-advantaged Bitcoin.

"The announcement of a small digital treasury asset sale, in our view, had a disproportionate impact on BTC, but does not change the fundamental backdrop," the analysts stated.

The bank continues to believe that flows into exchange-traded funds (ETFs) remain the main driver of Bitcoin's price growth, accounting for approximately 45% of the weekly return variance. Furthermore, ETF flows serve as the best indicator of new investor inflows in real time.

In this regard, the picture looks less encouraging: recent ETF flows have turned negative, and Citi believes sentiment is likely to remain subdued.

"We expect sentiment to remain subdued, especially given the continued sharp divergence from equity performance, absent positive regulatory news or concerns about 'currency depreciation' amid fiscal imbalances," the analysts noted.

A key factor to watch remains progress on the passage of the US digital asset market framework bill, which Citi views as a potential catalyst for attracting new investors. Analysts believe the chances of its passage this year are declining, but still remain at around 50%.

"The declining likelihood of the bill's passage and disappointing price performance relative to equities are dampening the interest of new investors and their advisors, limiting upside potential," the analysts noted.

They also added that selling by companies using digital assets as treasury instruments is unlikely to be a significant negative factor for Bitcoin prices, as the corresponding inflows and outflows tend to move in the same direction as ETF flows.

The bank's activity-based model estimates Bitcoin's fair value to be between $76,800 and $82,500, above current trading levels.

Regarding Ethereum, analysts noted that the key factor remains the level of technology adoption: the main variables to monitor are activity in the stablecoin and tokenization space, as well as whether it is built on the Ethereum network.