Bitcoin’s price has retreated to 68,500 dollars this Tuesday, after failing to consolidate above the 70,000 dollar psychological barrier briefly reached over the weekend. According to the trading firm Wintermute, the boom in artificial intelligence investments is acting as a ceiling for digital assets, by absorbing much of the available capital in global financial markets.
Jasper De Maere, an OTC trader at Wintermute, noted that the underperformance of cryptocurrencies during bullish periods is almost entirely explained by the rotation of funds toward the tech sector. However, the market seems to be seeking a balance point following the 2.7 billion dollar liquidations recorded last week, which eliminated the accumulated excess leverage.
Global liquidity and the impact of the tech sector on cryptocurrencies
On the other hand, the recent market drop, which took Bitcoin down to 60,000 dollars, does not seem to respond to a change in the sector’s fundamentals, but rather to a contraction in dollar liquidity. Raoul Pal, CEO of Global Macro Investor, explained that temporary capital drains linked to U.S. Treasury operations have affected both tech stocks and cryptocurrencies simultaneously.
Despite selling pressure, Sanae Takaichi’s electoral victory in Japan has brought some calm to risk investors by stabilizing government bond yields. Arthur Hayes, co-founder of BitMEX, suggested that this scenario could weaken the yen against the dollar, which would indirectly benefit digital assets by preventing a massive unwinding of the Japanese “carry trade.”
However, institutional demand indicators show signs of indecision, with the Coinbase premium index remaining in negative territory currently. Furthermore, flows into spot Bitcoin ETFs only recorded a net inflow of 145 million dollars yesterday, suggesting that risk appetite remains limited in the face of fierce competition from artificial intelligence investments.
Is it possible for Bitcoin to break its current range without a correction in the AI sector?
Because institutions now seem to dictate market direction through derivatives and exchange-traded funds, retail investor behavior has taken a backseat recently. Wintermute warns that for digital assets to once again outperform other sectors, it is necessary for the excitement over the AI trade to cool down significantly in the coming months of trading.
The importance of this analysis lies in identifying artificial intelligence not only as a disruptive technology but as a direct competitor for liquidity in modern institutional portfolios. Consequently, as long as capital flows massively into the Nasdaq, it is likely that the price of crypto assets will remain trapped in a sideways range without a clear and defined trend.
Ultimately, market stabilization will depend on the recovery of global liquidity and a capital rotation that once again favors digital scarcity. It is expected that if macroeconomic conditions in Japan and the United States remain stable, Bitcoin can finally find the necessary momentum to challenge its all-time highs once the frenzy for artificial intelligence reaches a saturation point.
