After an unsuccessful attempt to return above $67,200, bitcoin dropped sharply. In a short time, BTC lost about 7%, and long positions worth about $330 million were liquidated on the market.
The most unpleasant thing for traders is that the drop did not happen together with the tech sector. Nasdaq 100 was holding steady at this time and was about 1% from its all-time high. This means bitcoin started to move separately from tech stocks, even though it often used to mirror their dynamics.
Part of the pressure may have come from money flowing into the artificial intelligence sector. While investors are once again actively looking at AI companies, demand for risky positions in BTC looks weaker. If sellers maintain the initiative, the market could well test the $60,000 zone again.
Nasdaq 100 index futures on the left and bitcoin to the US dollar. Source: TradingView
The stock market received support from several factors at once. Investors responded positively to the memorandum of understanding between President Donald Trump of the USA and President Masoud Pezeshkian of Iran.
After this, oil fell to its lowest in about 15 weeks, dropping to $74 per barrel. For the markets, this is an important signal because cheaper oil reduces inflation risks.
Labor market data in the USA also helped. The number of people continuing to receive unemployment benefits remained around 1.81 million.
Against this backdrop, statements from Fed Chair Kevin Warsh sounded not too dovish for the crypto market. He mentioned price stability several times, and investors took this as a signal that the Fed may monitor inflation more strictly.
The yield on five-year US Treasury bonds USA remains around 4.21%. As long as it stays high, it is harder for risky assets to attract capital.
Gold to the US dollar on the left and the US dollar strength index DXY on the right. Source: TradingView
Pressure was also increased by a strong dollar. The US currency rose against a basket of other currencies, which usually hurts non-yielding assets.
When bonds offer high yields, it is easier for investors to keep money in calmer instruments. That is why not only cryptocurrencies but also gold are under pressure. Its price in this context dropped by about 3.3%.
Annualized funding rate of bitcoin perpetual futures. Source: Laevitas
Demand for leveraged longs on bitcoin began to noticeably weaken after June 4. At that time, BTC fell from $73,700 to $61,300 in three days, and some traders clearly became more cautious.
While bitcoin is losing momentum, the artificial intelligence sector continues to draw market attention. SpaceX , after its IPO according to sources, quickly reached a capitalization of $2.4 trillion.
Such a contrast only increases pressure on the crypto market. Money is going where the growth story is stronger right now, and for bitcoin, that has become more difficult.
The AI Sector Is Strengthening as Bitcoin’s Old Narratives Weaken
Shares of Intel rose by 10% on Thursday after Donald Trump announced a partnership between Apple and the company in processor manufacturing.
Micron and SK Hynix, which work with memory chips and data storage, also recently joined the list of companies valued at $1 trillion and above.
Against this backdrop, sentiment around bitcoin looks weaker. Lawyer and BTC supporter Joe Carlasare believes that traders are now even more pessimistic than during the FTX collapse.
See Also: Grayscale Considers AAVE Undervalued and Expects Growth to $179
He explains this by saying that in November 2022, there was pressure on almost all markets. Now the situation is different. Many of the ideas that previously motivated people to buy bitcoin no longer work as convincingly.
At the same time, bitcoin is now much more deeply integrated into traditional finance than in the previous halving cycle. US spot bitcoin ETFs have accumulated over $102 billion in assets. Morgan Stanley, Bank of America, and Goldman Sachs already offer clients products linked to BTC.
A drop to $60,000 still cannot be ruled out. The AI sector remains in the spotlight, and new IPOs and listings could continue to draw capital away. For bitcoin, the main question remains institutional demand. If it does not recover, pressure on the price may persist.
