- Cryptocurrency weakness persists, key technical floors eyed
- Bitcoin retests critical $60,000 bottom – can it hold?
- Is the AI IPO momentum crashing the crypto market?
- Investors should monitor the 200-week MA 'bear market' signal
Bitcoin sheds $1 trillion since October crypto crash
The world’s largest cryptocurrency is entrenched in a prolonged eight-month downturn, shedding roughly $1.2 trillion in market capitalization, while the broader cryptocurrency market has lost close to $2 trillion over that same period.
After peaking above $126,000 last fall, Bitcoin has surrendered roughly half of those gains, sliding back toward $60,000 and unwinding the rally that followed ‘crypto president’ Donald Trump’s 2024 re-election.
Now down more than 30% year-to-date, sentiment is increasingly reminiscent of prior market downturns. Last Friday, Bitcoin revisited the key $60,000 support level for the first time since February – marking its second test of that floor this year. The move capped its worst weekly performance (-16%) since the collapse of the FTX exchange in 2022 (-23%).
Divergence from traditional markets widens
Clearly, confidence has weakened, with investor positioning turning decisively cautious and leaving Bitcoin underperforming traditional assets. Equities continue to push higher, gold remains (in comparison) resilient, and the divergence – particularly with tech stocks, with which Bitcoin has historically traded in tandem – is becoming impossible to ignore.
At the same time, Bitcoin is struggling to maintain its dual narrative. It is losing ground not only as a high-risk growth asset but also as a “digital gold” hedge. Its inability to hold gains during recent geopolitical tensions has cast doubt on its effectiveness as a store of value. More broadly, uncertainty around Bitcoin’s identity – whether it functions as a risk asset, a hedge, or simply a speculative vehicle – is clouding its role in portfolios and eroding conviction.
The vibes are off - has the buzz shifted to AI?
Clearly, market attention appears to be shifting elsewhere. The selloff has been driven by a mix of factors: tighter financial conditions, a stronger US dollar, rising interest rate expectations – all of which reduce the appeal of non-yielding assets – alongside growing questions over whether large corporate buyers can continue accumulating.
At the same time, competition for speculative capital has intensified. The rapid rise of artificial intelligence has captured both retail and institutional attention, diverting flows away from crypto – an asset class largely driven by speculative hype that now appears to have lost its cool. The ongoing AI and IPO heatwave – including players such as OpenAI, Anthropic and SpaceX – is pulling liquidity toward equities, where returns have been more immediate.
ETF flows reinforce this shift. June alone saw Bitcoin ETF outflows reach $1.8 billion, while US-listed spot Bitcoin ETFs have recorded over $5 billion in net outflows over the past four weeks. Should we expect Bitcoin to remain under pressure until tech and AI enthusiasm cools?
Strategy’s shock Bitcoin sale still weighs
Market structure has amplified the downturn. Heavy liquidations of leveraged positions have accelerated price declines, while activity from major holders has added further volatility. MicroStrategy (Strategy), the world’s largest corporate holder of Bitcoin, surprised markets after disclosing it sold 32 Bitcoin at the end of May for approximately $2.5 million – breaking founder Michael Saylor’s long-standing “never sell” stance.
Although the company sought on Monday to reassure investors by purchasing 1,550 Bitcoin for around $101 million – far exceeding the earlier sale – the move, poorly timed, has nonetheless dented confidence in the consistency of institutional demand.
Bear market signals emerge; spotlight on 200-week MA
Despite occasional relief rallies, sentiment remains fragile. Looking ahead, Bitcoin’s ability to hold the $60,000 support level will be critical, with a sustained break suggesting a durable bottom has yet to form.
From a technical perspective, Bitcoin is entering a decisive phase. The recent dip below the 200-week moving average – a historically significant indicator – points to a potential transition into a bear cycle, while current price action suggests a distribution phase as investors weigh accumulation at lower levels against further exits.
While short-term rebounds are possible given oversold conditions, they are likely to be corrective. Any move above the $75,000-$80,000 range would still be viewed as a bounce within a broader downtrend, with a break above that range needed to signal a meaningful shift in momentum.
What’s next?
A sustained recovery hinges on several factors: a reversal in ETF outflows, easing inflation, stabilizing bond yields, progress on regulatory clarity, and a slowdown in capital rotation toward AI and tech equities.
Until key technical levels are reclaimed and macro conditions improve, the outlook remains cautious; without a recovery in flows and sentiment, Bitcoin’s market regime remains unchanged.