Bitcoin
Cryptocurrency markets are reeling under the weight of widespread investor anxiety. And this time, the pressure is coming not from regulation or monetary policy, but from Wall Street’s obsession with artificial intelligence.
Important points
- Analysts say concerns about the AI stock bubble are spilling over into the crypto market.
- BTSE’s Jeff May warns that a sharp technical correction could further widen Bitcoin’s losses.
- SignalPlus’ Augustine Fan highlights the lack of new catalysts and continued regulatory vigilance.
- The global cryptocurrency market capitalization has fallen 20% from its peak of $4.4 trillion, with $19 billion liquidated.
- Bitcoin has fallen below its 200-day average, raising concerns that the decline will be prolonged.
According to BTSE chief operating officer Geoff May said recent withdrawals across digital assets can be traced back to growing concerns that AI-related tech giants are dangerously overvalued. “If the enthusiasm around AI stocks breaks down, the same sentiment will spill over into cryptocurrencies. The two markets feed into each other,” May warned.
A tired market searching for direction
Behind the scenes, analysts say cryptocurrencies are drifting without a clear catalyst to regain bullish momentum. Augustin Huang, a partner at SignalPlus, said investors are hesitant to take large positions as global regulators increase scrutiny and cybersecurity risks increase.
“The market is waiting to believe in something new,” Huang said. “At this time, there is no new narrative strong enough to bring back significant institutional funding.”
After months of strong gains earlier this year, many traders have turned cautious, an attitude reflected in subdued volumes and diluted liquidity across exchanges.
From euphoria to fatigue
In early October, the cryptocurrency market was at its most exciting time in years. The total amount at one point reached $4.4 trillion, setting a new record. But by November, nearly a fifth of that value had evaporated, wiping out much of this year’s progress.
The decline was amplified by a wave of mass liquidations that wiped out about $19 billion in leveraged positions, forcing traders to sell their holdings at a loss and deepening the panic. For many, it was a jarring reminder of how quickly a volatile industry can lose steam.
Technical failures increase anxiety
Bitcointhe market anchor offered little reassurance. After months of steady performance, the stock has finally fallen below its 200-day moving average, a chart line that many investors consider a measure of long-term strength.
It’s the first time it has fallen below this level since the 2022 bear market, rekindling old concerns that the current correction will be longer. Traders who were once rooting for Bitcoin’s resilience are now watching closely to see if Bitcoin can regain that critical support.
big picture
This situation highlights how intertwined the risk market is. Once a symbol of unstoppable innovation, AI stocks now represent the same speculative fever that once defined cryptocurrencies themselves. If tech company valuations continue to cool, pressure on digital assets could increase and the market enter a new defensive phase.
Still, some long-term investors remain calm, calling the decline a “healthy reset” after months of rapid growth. But for now, sentiment has shifted from greed to caution, and Bitcoin’s next move could depend as much on the fate of Silicon Valley as it does itself.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any particular investment strategy or cryptocurrency. Always do your own research and consult a licensed financial advisor before making any investment decisions.
Costa joined the team in 2021 and quickly established himself with his thirst for knowledge, incredible dedication and analytical thinking. In addition to covering a wide range of current events, he also writes excellent reviews, PR articles, and educational materials. His articles have also been quoted by other news agencies.