Bitcoin on Tuesday remained stubbornly low at roughly $61,000 after a brutal week of trading – and analysts are sounding the alarm that more downside could be in store as investors pivot to flashy artificial intelligence IPOs.
The cryptocurrency briefly dropped below $60,000 last week – its lowest level since October 2024 and more than 50% off its record high last year above $126,000.
It marked Bitcoin’s worst week since the FTX crash of 2022, when Sam Bankman-Fried’s embezzlement scandal eroded trust in digital assets and wiped out $200 billion from the crypto market within a few days.
The token dropped 2% Tuesday to $61,789.36.
“We continue to be in a clear downtrend for multiple months now, until price action suggests otherwise,” Jake Kennis, analyst at Nansen, told The Post. “Bear markets usually take many months to even years to shake out, so this can go on for quite some time.”
Investors have been fleeing Bitcoin exchange-traded funds as hopes for interest-rate cuts have dwindled, inflation remains stubbornly high and the labor market shows signs of resilience.
But the tech-heavy Nasdaq also sank 1.7% Tuesday, with chip stocks leading the declines – signaling the market is bracing for a batch of massive IPOs in the tech sector.
“Among other things, traders were selling what they could sell to raise funds for IPO investments, led by SpaceX,” Nancy Tengler, chief executive of Laffer Tengler Investments, said in a note Tuesday.
Elon Musk is planning a massive SpaceX IPO on Friday that could value the rocket-launch firm at a whopping $1.75 trillion.
Anthropic, the Claude developer valued at $1 trillion, isn’t far behind with its own planned IPO, and ChatGPT-maker OpenAI on Monday announced it has filed for its own public debut.
“You have institutional guys pulling cash out of the crypto ETFs and dumping it straight into AI and tech stocks where the returns are instant,” William Stern, founder and chief executive of Cardiff, a financial analysis firm and small business lender, told The Post.
“Expect more downside until the tech hype cools down and that cash decides to rotate back.”
A shock Bitcoin sale from Strategy also piled on to the sell-off conditions, spooking investors.
The world’s largest corporate holder of Bitcoin announced it had sold 32 Bitcoin at the end of May for roughly $2.5 million – breaking a longstanding pledge by founder Michael Saylor to “never sell.”
Strategy, formerly known as MicroStrategy, attempted to quell market jitters on Monday, announcing it had also bought 1,550 Bitcoin for about $101 million, but investors still seemed wary.
Bitcoin’s metrics also emerged as a cause for concern, as the token last week fell below its 200-week moving average – a technical indicator often used by investors to estimate volatility.
“The break below the 200-week moving average provides important confirmation that markets may have entered a bear phase,” Paul Howard, senior director at crypto trading firm Wincent, told Bloomberg. “This rally is unlikely to prove sustainable.”
Analysts at Bitfinex, a cryptocurrency exchange, also noted that Bitcoin is showing signs of a bear market.
“Unlike previous months where dips were aggressively bought, the current distribution cycle means rallies are being utilized to exit the market,” the analysts wrote in a note Tuesday.