Bitcoin just erased its hard-earned gains after last week's crash. The world's leading crypto falls back towards $65,000, the collateral victim of a panic which is hitting the technology sector hard. Even precious metals are not immune.
In brief
- Bitcoin falls to $65,000, reversing almost all of its rebound above $70,000.
- Tech stocks tumble, with the IGV ETF losing 3% in one session on AI concerns.
- Silver collapses 10% and gold falls 3% in a widespread sell-off.
- The correlation between cryptos and software reaches rarely seen levels.
Tech drags bitcoin down
Bitcoin lost 2% on Wednesday, sliding towards $65,000 after briefly breathing above $70,000. Ether and Solana are following the same bearish trajectory. This relapse does not occur by chance. It perfectly matches the movements of the Nasdaq, down 2%, and especially those of the software sector.
The iShares Expanded Tech-Software Sector ETF (IGV) plunged 3% on Wednesday. It now shows a drop of 21% since the start of the year. Investors are questioning the high valuations of tech companies as artificial intelligence agents advance at warp speed in programming. This revolution could shake up the sector faster than expected.
“ Tech stocks are in trouble again today », Notes Jim Bianco, recognized macroeconomic strategist.
IGV is almost back to last week's lows, at the height of the panic.
He adds a crucial point: “ Don't forget that there is another type of software, 'programmable money', cryptos. It's the same thing. »
This correlation is not new, but it is reaching worrying heights. Bitcoin behaves more and more like a risky technological asset and less and less like an uncorrelated store of value.
A contagion that spares no one
Panic has even affected traditional shelters. Gold, long considered a safe haven, lost 3.1% to end at $4,938 per ounce. Silver suffered a real crash with a fall of 10.3% to $75.08.
These sudden movements show that investors are massively liquidating their positions, regardless of the asset class. They are looking for liquidity rather than protection. This situation is reminiscent of times of extreme stress when all correlations converge to one.
However, some contradictory signals emerge. Bitcoin ETFs saw $167 million in inflows over three days, following weeks of withdrawals. Ark Invest's ARKB and Fidelity's FBTC capture most of these flows. Some institutional investors are therefore taking advantage of the decline to position themselves.
Research firm K33 even believes that the capitulation is complete after the fall towards $60,000 last week. Bitcoin's daily RSI plunged to 15.9, its sixth most extreme oversold level since 2015. Historically, such levels often precede significant rebounds.
Bitcoin finds itself at a crossroads. On the one hand, institutional fundamentals continue to strengthen with targeted inflows into ETFs. On the other hand, the correlation with the tech sector exposes crypto to powerful headwinds. As long as fears about the impact of AI on technology valuations persist, bitcoin will remain under pressure.
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