Bitcoin fell back below $63,000, driven by a massive sell-off in technology stocks. This decline confirms that the first crypto remains closely linked to risky assets, despite the decline in oil and the partial easing of geopolitical tensions.
In brief
- Bitcoin fell below $63,000 as the Nasdaq fell.
- Concerns around AI and US rates dominate the market.
- The $60,000 support could quickly be tested.
Bitcoin falls in the wake of the Nasdaq
Bitcoin slipped below $63,000 after briefly surpassing $65,000 on Monday. This movement accompanies a new correction in technology markets. It recalls a previous episode where fears linked to AI had already caused the Nasdaq and crypto to plunge simultaneously.
The Nasdaq 100 came under heavy pressure, while semiconductor makers and several large technology companies retreated. Nvidia and Alphabet have lost ground. Intel, AMD and Marvell saw even steeper declines.
Bitcoin followed this dynamic. It was trading around $63,600 at the start of the session, down over the day and over the week. Its momentary drop below $63,000 shows that sellers retain control as soon as risk aversion returns.
AI Concerns Contaminate Crypto
The decline in technology stocks does not come from a sudden collapse of their activities. Investors are instead wondering about the gigantic cost of the infrastructure necessary for artificial intelligence.
Large companies borrow and spend huge amounts of money to build data centers, buy chips, and power their models. This run is starting to raise questions about future profitability and debt burden.
When investors reduce their exposure to tech stocks, they often sell bitcoin as well. Both markets attract some of the same speculative capital and respond to the same liquidity conditions.
This correlation weakens the narrative of bitcoin as a completely independent asset. In the short term, crypto behaves more like a high-volatility technology stock than a safe haven. This proximity to the Nasdaq had already been observed during previous bitcoin corrections.
The Fed is heavier than oil
The decline in oil should normally have supported risky assets. A cheaper barrel reduces inflationary pressures and reduces costs for businesses. However, this positive effect was not enough to reassure the markets.
Investors are focusing more on the Federal Reserve. The market fears a more restrictive monetary policy if inflation remains persistent. Expectations of a rate hike before the end of the year have strengthened the dollar and pushed bond yields higher.
This context is unfavorable for bitcoin. High rates make bonds more attractive and reduce the amount of capital available for speculative assets. Investors also become less willing to hold risky positions without guaranteed returns.
Bitcoin therefore remains stuck between two forces. The decline in oil prices provides macroeconomic support. But the Fed, the dollar and the technological correction are exerting more immediate pressure.
The $60,000 threshold for bitcoin returns to center
Bitcoin must now defend the zone between $62,000 and $63,000. Stabilization at this level could keep the market in its recent range and prepare for a new test of $65,000.
A clearer break, however, would put the $60,000 threshold back at the center of the debate. Bitcoin had already fallen as low as around $59,100 earlier this month before rebounding. This area now represents major psychological support.
The rest of the crypto market also remains under pressure. Ether retreated towards $1,650, while Solana, XRP and Dogecoin followed the decline. Altcoins generally continue to amplify bitcoin's movements when liquidity contracts.
The next direction will mainly depend on technology stocks, American economic data and the Fed's speech. As long as investors fear further monetary tightening, bitcoin will have difficulty moving away from $60,000 sustainably. The recent decline towards $59,100 is a reminder that the market remains vulnerable to a new wave of selling.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
