Bitcoin dropped to the $63,000 range on Friday, dragged down by a global wave of chip stock selling that rippled across risk assets. Prices briefly touched $63,020-$63,075, down 1.2-1.7% over 24 hours and 2.2% on the week - now sitting roughly 50% below its all-time high of $126,080 set last October, according to CoinGecko data.
The catalyst did not originate within the crypto market. A semiconductor stock selloff - dubbed a ‘chip rout’ by traders - pressured Nasdaq 100 futures down 1.8-1.91% and S&P 500 futures down 0.9-0.96%, while semiconductor ETFs tumbled 3% in pre-market trading. TSMC’s earnings report this week failed to alleviate investor doubts regarding the sustainability of hyperscaler AI spending.
Global Markets Sink in Tandem
Selling pressure spread evenly across Asia. Taiwanese equities entered a technical correction, key regional indices hit two-month lows, Japan’s Nikkei 225 sank 4%, and South Korean markets were closed for a holiday. Geopolitical tensions in the Strait of Hormuz added further strain to market sentiment. Patrick Munnelly, an analyst at Tickmill Group, summed it up in a single phrase: ‘AI fatigue and Hormuz heat’ - AI euphoria fatigue combined with Middle East tensions.
This reflects a classic risk-off pattern. Investors fled to safe-haven assets: the US Dollar Index (DXY) climbed to 100.75, and gold prices gained 0.61% to move back above $4,000. Total crypto market capitalization contracted 1.86% to $2.16 trillion. Ether dropped 1.74% on the day to $1,836 but remained up 2.4% on the week, while Hyperliquid emerged as the biggest loser with an 8% daily and 12% weekly correction.
Signals Emerging as Prices Plunge
Here is where the narrative shifts. According to Glassnode, more than 65% of coins flowing into exchanges came from long-term holders realizing losses - a pattern reminiscent of previous bear market phases when this cohort dominated the sell side right before finally ‘running out of ammunition.’ An analyst named Sun, quoted by Decrypt, described investors holding BTC for one to two years as now ‘slowly accepting losses and stepping out.’
The crypto market’s average RSI dropped to 42.23, nearing oversold conditions that previously triggered a rally in July of last year. Data from K33 Research is even more telling: the percentage of BTC supply in loss has exceeded 50% since June 5 - lasting 42 days, the second-longest window in Bitcoin’s history. Historically, once this 50% threshold is breached, the bear market cycle bottom arrives at most 101 days later (the 2014 record), with the quickest windows taking just 13 days (2022) and 23 days (2018).
The Realized Cap Variance model from a CryptoQuant contributor shows a Z-score of -2.35, placing it in the bottom 6% of its historical range. Whenever this model has sustained levels below -2.0 - in late 2018, mid-2022, and early 2015 - the subsequent 12-month returns have consistently exceeded 75%.
Reading the Numbers Without False Hope
On-chain data may indeed suggest that the hardest phase is nearing an end, and rising trading volume on centralized exchanges for the first time in five months - with spot volume jumping 15.3% to $1.11 trillion - indicates that interest is starting to return. However, cyclical statistics are not guarantees. The Fed’s meeting on July 28-29 will serve as a real test of whether macroeconomic pressures will ease or intensify further. For now, bottom signals and the reality of declining prices coexist - and only time will separate the two.
Sourced from Decrypt, CoinDesk & Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
