Bitcoin is stuck in a month-long slump, dropping another 3% on Tuesday to hit $66,707. The world’s largest cryptocurrency is struggling to find its footing as nervous investors retreat from risky assets, mirroring a broader sell-off in the technology sector.
The decline comes as Wall Street grows anxious about the future of artificial intelligence and the general state of the economy. For months, Bitcoin has traded in lockstep with tech stocks. When Big Tech takes a hit, Bitcoin usually follows, and right now, tech investors are selling. Traders are also eyeing rising tensions with Iran and uncertain inflation data, which has dampened hopes for quick interest rate cuts from the Federal Reserve.
The mood in the market is grim. CryptoQuant’s “Fear and Greed Index,” which tracks investor sentiment, dropped to a score of 10 out of 100 on Monday. This puts the market deep into “extreme fear” territory.
Money is flowing out of the crypto market at a steady pace. U.S. Bitcoin exchange-traded funds (ETFs) saw a fourth straight week of withdrawals, with investors pulling $360 million out of the funds last week alone.
Paul Howard, a senior director at market maker Wincent, says that macroeconomic news is currently the main driver for crypto prices. He pointed to a looming U.S. Supreme Court ruling on tariffs, expected this Friday, as a major event that could shake things up even more than the usual inflation reports.
Experts are now debating just how low Bitcoin could go. Robin Singh, CEO of the crypto tax platform Koinly, warned that the current price of around $60,000 is a critical support level. If Bitcoin falls below that, things could get ugly.
“One macro wobble, another wave of uncertainty, or even just sustained chop in the mid-$60,000s could easily tip this into a sharper flush back into the $50,000s,” Singh said. He noted that the market hasn’t yet seen the kind of “full capitulation,” or panic selling, that usually signals the true bottom of a crash.
