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Bitcoin Drops Below $71,000 Amid Renewed Selloff

Bitcoin has recently experienced a significant decline, sliding below the $71,000 mark during Asian trading hours on Thursday. This downturn comes as global technology stocks endure a fresh round of selling, negatively impacting the cryptocurrency market and dampening previous hopes for a lasting rebound after a week filled with volatility.

Declining Prices and Investor Sentiment

Over a 24-hour period, the world’s largest cryptocurrency fell by as much as 7.5%, reaching lows near $70,700 before recovering slightly from those losses, according to data from CoinDesk. This drop follows a string of declines in Asian equities, where growing concerns about artificial intelligence spending, inflated valuations, and slowing earnings momentum have driven investors away from riskier assets.

Asian Markets Take a Hit

MSCI’s Asia tech index has declined for the fifth time out of the last six sessions. The index was led down by significant losses in South Korea’s Kospi, which saw a decline of around 4%. A number of heavily weighted AI-linked stocks faced mounting pressures, exacerbating the overall market slump.

The woes in the cryptocurrency market were further fueled by the disappointing performance of U.S. equities, particularly the Nasdaq, which took a hit due to disappointing earnings reports from major companies like Alphabet, Qualcomm, and Arm. These results have intensified fears that investments in AI may be peaking sooner than analysts originally anticipated.

Bitcoin’s Risk Asset Nature

Bitcoin’s price behavior has increasingly mirrored that of high-beta risk assets during times when equities are under stress, especially when market liquidity is low and macroeconomic uncertainties heighten. The latest drop follows an earlier brief fluctuation where Bitcoin plunged towards $73,000 only to bounce back above $76,000—an occurrence that some traders interpret as indicative of shaky conviction rather than a reliable trend reversal.

In a message shared on Telegram, Wenny Cai, COO at Synfutures, commented, “Bitcoin’s move below the low-$70,000s has accelerated a broader deleveraging, flushing out crowded positioning built during the post-ETF rally. Liquidations have been heavy, sentiment shifted to risk-off, and the price action is now more influenced by balance-sheet mechanics than by narrative flow.” Cai also mentioned that, while this downturn might mark the end of complacency, it does not signify the demise of institutional participation in the cryptocurrency space.

Commodity Market Influence

The pressures on Bitcoin were compounded by sharp declines in commodities. For instance, silver plunged as much as 17%, and gold experienced over a 3% drop. These declines extend a brutal unwind situation that has already triggered significant liquidations in tokenized metal products on various cryptocurrency platforms.

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