Bitcoin Slumps to 10-Day Low Amid AI-Linked Stocks Sell-Off
The Bitcoin price has fallen to a 10-day low of around $63k as a sell-off in AI-linked stocks hits risk sentiment, spilling over into cryptocurrencies. The total crypto market capitalisation has dropped 2.6% to $2.17 trillion.
This comes amid a sharp decline in technology stocks globally, with South Korea's Kospi down 10% and Japan's Nikkei closing 3.8% lower. Nasdaq futures are also pointing around 1% lower ahead of the open.
The weakness in crypto is partly due to investors reassessing Federal Reserve policy expectations. Strong labour market data, resilient business activity, and elevated energy prices have kept inflation concerns alive, increasing the chances of either a Fed rate hike this week or a hawkish policy signal. According to the CME FedWatch Tool, markets are now pricing in a 38% probability of a 25-basis-point rate hike at this week's meeting.
Institutional demand for Bitcoin remains weak, with open interest in CME Bitcoin futures and options falling to multi-year lows. The BTC technical analysis suggests the outlook is bearish, with initial support seen at the psychological $60K level.